SEOUL, June 13 Reuters South Korea said on Thursday the ban on shortselling of stocks will be extended for now as the government focuses on developing a system to control illicit trading practices before resuming the trading strategy.

The Financial Services Commission FSC plans to set up by March next year an electronic monitoring platform, first introduced in April to better detect nakedshort sales, the regulator said after a meeting with the ruling party and related financial agencies.

The FSC said it would also revise shortselling rules to level the playing field between retail and institutional investors and strengthen fines on illicit trading practices, as announced in November.

Local Yonhap News reported the ban is likely to stay until the end of March next year, without citing anyone.

The ban had been set to expire on June 30.

The party requested that the current shortselling ban be extended until an electronic system is established, the ruling People Power party said in a statement released after the meeting.

Shortselling, a practice involving borrowing shares and then selling them in the market, has been an unpopular trading strategy among South Korean retail investors and has been banned since November last year as authorities vowed to root out illegal trading practices including naked shortselling.

Global investors are closely monitoring South Korea39;s shortselling rules as critics blame the inability to place bearish bets as a hedging strategy for…