Hong Kong proposes short selling changes
30 November 2015 Hong Kong
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Hong Kong’s Securities and Futures Commission (SFC) has proposed expanding the scope of short position reporting to all securities eligible for short selling on the Hong Kong Stock Exchange.
The SFC launched a consultation on the proposed changes on 27 November.
Under the proposed changes, short position reporting will be extended to all 889 designated for short selling, which currently accounts for 44 percent of activity in Hong Kong.
Currently, 127 stocks are subject to short position reporting. The SFC anticipates that expanding coverage to all designated securities will reveal aggregated short positions of more than HKD $100 billion (USD $12.9 billion).
The reporting threshold trigger for designated securities that are stocks will remain unchanged, at the lower of 0.02 percent of the stock’s market capitalisation, or HKD $30 million (USD $3.87 million).
But for collective investment schemes, which include exchange-traded funds, real estate investment trusts and other unit trusts/mutual funds, the reporting threshold trigger will be set only at the HKD $30 million threshold.
Ashley Alder, CEO of the SFC, commented: “We have seen growth in short selling since the short position reporting regime was introduced in 2012. The expanded regime will help improve monitoring and enhance market transparency, and this will be conducive to the long-term development of the industry.”
The SFC is inviting public comments on the consultation, with a deadline of 31 December.
The SFC launched a consultation on the proposed changes on 27 November.
Under the proposed changes, short position reporting will be extended to all 889 designated for short selling, which currently accounts for 44 percent of activity in Hong Kong.
Currently, 127 stocks are subject to short position reporting. The SFC anticipates that expanding coverage to all designated securities will reveal aggregated short positions of more than HKD $100 billion (USD $12.9 billion).
The reporting threshold trigger for designated securities that are stocks will remain unchanged, at the lower of 0.02 percent of the stock’s market capitalisation, or HKD $30 million (USD $3.87 million).
But for collective investment schemes, which include exchange-traded funds, real estate investment trusts and other unit trusts/mutual funds, the reporting threshold trigger will be set only at the HKD $30 million threshold.
Ashley Alder, CEO of the SFC, commented: “We have seen growth in short selling since the short position reporting regime was introduced in 2012. The expanded regime will help improve monitoring and enhance market transparency, and this will be conducive to the long-term development of the industry.”
The SFC is inviting public comments on the consultation, with a deadline of 31 December.
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