The Financial Supervisory Service(FSS) will launch a special investigation team on Monday to scrutinize the activity of about ten global investment banks for short selling.

FSS Governor Lee Bok-hyun disclosed the plan on Sunday in a press briefing after the top regulator, the Financial Services Commission, announced a ban on the practice until the end of June next year.

Lee said that investigation is already under way for some of the investment banks, which account for a significantly disproportionate volume of short selling, warning that violators will face stern punishment and criminal prosecution.

The FSS chief said that the government will guide global investment banks to voluntarily improve their system to prevent the recurrence of the illegal market move.

Last month, the financial watchdog identified two Hong Kong-based investment banks, BNP Paribas and HSBC, for their deliberate and habitual engagement in illegal short-selling activities.