SEOUL, March 8 Reuters South Korea39;s financial regulator fined two firms for naked short selling in the local stock market, for the first time under the new law of heavier penalties.

The Financial Services Commission FSC said that the firms were each fined 2.18 billion won and 3.87 billion won for their illegal trading in 2021, in a statement released on Wednesday.

They were the first cases fined under the revised Capital Markets Act that came in effect in April 2021 and raised fines to maximum five times of illegal profits from 100 million won, according to the FSC.

Naked short selling of stocks in which an investor short sells shares without first borrowing them or determining they can be borrowed is banned by the Capital Markets Act in South Korea.

The Commission did not name the firms in the statement.

Reporting by Jihoon Lee

Source Reuters