Philippines permits short selling on PSE Index stocks and selected midcaps
06 November 2023 Philippines
Image: tupungato/adobe.stock.com
Short selling is permitted in the Philippines from today, with 52 stocks and one exchange-traded fund listed on the Philippines Stock Exchange now available for short sales.
This includes stocks included in the stock exchange’s PSE Index, along with select equities from the PSE MidCap and PSE Dividend Yield Indices.
The terms for short selling activities on this list of stocks are detailed in the PSE’s Guidelines for Short Selling Transactions.
In May, the Securities and Exchange Commission (SEC), the securities market regulator in the Philippines, approved use of offshore collateral in securities-based lending transactions.
Four months later, the Philippines Board of Internal Revenue approved the filing and registration of the Global Master Securities Lending Agreement (GMSLA) in September.
A set of rules and guidelines was initially approved by the Securities and Exchange Commission (SEC) in December 2019, but was subsequently sent back to the market for further consultation. It was then subject to further delays owing to the Covid pandemic.
The initial proposal, advanced in 2019, extended short selling for PSE Index stocks, but the exchange has now widened the range of eligible shares as detailed above.
Commenting on these developments, Ramon S Monzon, president and CEO of the Philippines Stock Exchange, says: “We are grateful to the SEC and BIR for their approvals on important regulatory aspects of SBL and short selling. This development [has prepared the way for] the full adoption and implementation of these much-awaited programmes.”
Stephen Howard, CEO of Pan Asia Securities Lending Association (PASLA), comments: “PASLA welcomes this significant milestone in the evolution of the Philippines equity markets and their market structure.
"This is the culmination of extensive efforts on the part of the Philippine Stock Exchange, launching its securities financing solution that provides a short-selling infrastructure to market participants. It is an exciting development that will undoubtedly enhance liquidity and market efficiency."
Howard adds that PASLA looks forward to continuing its work with the PSE to ensure that market participants are well-versed with international best practices. "We believe that education and awareness are key to the successful implementation in the Philippine market. The association supports this next step in developing the risk management toolkit that is available for investors that also enhances price discovery."
This includes stocks included in the stock exchange’s PSE Index, along with select equities from the PSE MidCap and PSE Dividend Yield Indices.
The terms for short selling activities on this list of stocks are detailed in the PSE’s Guidelines for Short Selling Transactions.
In May, the Securities and Exchange Commission (SEC), the securities market regulator in the Philippines, approved use of offshore collateral in securities-based lending transactions.
Four months later, the Philippines Board of Internal Revenue approved the filing and registration of the Global Master Securities Lending Agreement (GMSLA) in September.
A set of rules and guidelines was initially approved by the Securities and Exchange Commission (SEC) in December 2019, but was subsequently sent back to the market for further consultation. It was then subject to further delays owing to the Covid pandemic.
The initial proposal, advanced in 2019, extended short selling for PSE Index stocks, but the exchange has now widened the range of eligible shares as detailed above.
Commenting on these developments, Ramon S Monzon, president and CEO of the Philippines Stock Exchange, says: “We are grateful to the SEC and BIR for their approvals on important regulatory aspects of SBL and short selling. This development [has prepared the way for] the full adoption and implementation of these much-awaited programmes.”
Stephen Howard, CEO of Pan Asia Securities Lending Association (PASLA), comments: “PASLA welcomes this significant milestone in the evolution of the Philippines equity markets and their market structure.
"This is the culmination of extensive efforts on the part of the Philippine Stock Exchange, launching its securities financing solution that provides a short-selling infrastructure to market participants. It is an exciting development that will undoubtedly enhance liquidity and market efficiency."
Howard adds that PASLA looks forward to continuing its work with the PSE to ensure that market participants are well-versed with international best practices. "We believe that education and awareness are key to the successful implementation in the Philippine market. The association supports this next step in developing the risk management toolkit that is available for investors that also enhances price discovery."
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