South Korea's government and ruling People Power Party will extend a ban on short selling until March next year and increase fines and punishment for the practice, Yonhap news agency reported on Thursday.

The ban had been set to expire on June 30.

Short-selling, 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 short-selling.