South Korea will partially lift its ban on short selling of listed stocks from Monday, ending a 14-month ban imposed to protect investors from a sudden market fall triggered by the COVID-19 pandemic.

The Financial Services Commission said on Sunday that the ban on 200 large-cap firms listed on the main KOSPI and 150 firms listed on the secondary KOSDAQ will be lifted.

Stock short selling is a trading strategy in which investors sell stocks they borrowed on the belief that share prices will fall in the near future.

Retail investors will now be allowed to sell short, up to 30 million won of stocks, after receiving related education at the Korea Institute of Financial Investment.

In addition, 28 brokerages will be allowed to lend individual short sellers stocks by the end of this year. Previously, just six brokerages offered retail investors short selling privileges.

The nation will also toughen its crackdown and punishments on illegal short selling by introducing fines and criminal penalties.