Hong Kong stock exchange tightens short selling rules
14 May 2012 Hong Kong
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The Stock Exchange of Hong Kong has tightened the rules that regulate the short selling of designated securities after it conducted a review earlier this year.
Short selling has come under fire in the wake of the financial crisis as politicians and regulators attempt to stabilise financial markets.
The move to tighten restrictions for short selling in Hong Kong follows the enactment of similar legislation in the US and Europe.
The Stock Exchange of Hong Kong plans to increase the eligibility criteria for market capitalisation and turnover velocity from HKD$1 billion to $3 billion and 40 percent to 50 percent respectively.
In a statement, the exchange said: “The change reflects the fact that the average market capitalisation of listed companies in Hong Kong has grown by around three times and the market turnover velocity has increased from around 40 per cent to over 50 per cent in the past decade.”
“Had the new short selling eligibility criteria been adopted in the last quarterly review in April this year, 82 out of the existing 646 designated securities would have become ineligible for short selling.”
Short selling has come under fire in the wake of the financial crisis as politicians and regulators attempt to stabilise financial markets.
The move to tighten restrictions for short selling in Hong Kong follows the enactment of similar legislation in the US and Europe.
The Stock Exchange of Hong Kong plans to increase the eligibility criteria for market capitalisation and turnover velocity from HKD$1 billion to $3 billion and 40 percent to 50 percent respectively.
In a statement, the exchange said: “The change reflects the fact that the average market capitalisation of listed companies in Hong Kong has grown by around three times and the market turnover velocity has increased from around 40 per cent to over 50 per cent in the past decade.”
“Had the new short selling eligibility criteria been adopted in the last quarterly review in April this year, 82 out of the existing 646 designated securities would have become ineligible for short selling.”
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