SEOUL, Nov 16 Reuters South Korea39;s financial regulator said on Thursday authorities plan to loosen stock shortselling rules for retail investors, while tightening rules for institutional and foreign investors, to promote a level playing field in the market.

President Yoon Suk Yeol39;s government introduced the controversial ban on short selling in the stock market this month.

The Financial Services Commission FSC said in a statement it would lower the ratio of cash required as collateral for retail investors to borrow stocks to 105, down from the current 120, to match the ratio for institutional investors.

For institutional investors, a new cap of a maximum 90 days will be imposed on borrowing of stocks for short selling, in line with retail investors, according to the statement.

The FSC announced the measures, along with rules to prevent illegal trades, after a meeting with other financial authorities and the ruling party to prepare regulatory changes for short selling in the stock market.

The ban on short selling of stocks will stay until there is enough improvement in regulations, FSC Vice Chairman Kim Soyoung was quoted by local media as saying after the meeting.

Fair rules sound good, but actually, there was a reason why retail investors were under stricter rules protection, said Huh Jaehwan, an analyst at Eugene Investment Securities.

I39;m not sure retail investors will really benefit, because shortselling may increase more after retail investors are…