South Korea will prohibit stock short-selling until June 2024 to allow regulators to "actively” improve rules and systems, the Financial Services Commission said.

Trading with borrowed shares will be banned for equities on the Kospi 200 Index and Kosdaq 150 Index from Monday until the end of June, the commission said on Sunday.

"Amidst market turmoil, we’ve discovered massive illegal naked short-selling by global investment banks and circumstances of additional illegal activities,” Financial Services Commission Chairman Kim Joo-hyun told a briefing. "It’s a grave situation where illegal short-selling undermines fair price formation and hurts market confidence.”