Philippines inches closer to allowing short selling
18 February 2021 Philippines
Image: tupungato/adobe.stock.com
The Philippines Stock Exchange (PSE) will finally launch a short selling facility once three key final hurdles are overcome, CEO Ramon Monzon has confirmed.
While there are no more pending issues with regards to the short selling capabilities currently in the pipeline, there is a lot riding on the securities borrowing and lending programme, SFT understands.
A PSE spokesperson says the exchange is working to address concerns raised by foreign participants regarding the market’s trading rules framework to make it viable for them to actively participate in the programme.
The rules and guidelines were initially approved by the Securities and Exchange Commission (SEC) in December 2019 but were subsequently sent back for revision upon feedback from market participants.
The PSE is waiting for the green light from the SEC on two key items before short selling can begin.
This includes approval of the Philippines Depository and Trust Corporation as an agent lender, and approval of identified offshore assets (securities and currencies) as collateral for foreign participants.
Elsewhere, the Bureau of Internal Revenue must approve the use of Global Master Securities Lending Agreement for foreign participants to replace the Philippines own MSLA.
The introduction of short selling into the Philippines market has faced repeated delays in recent years, with the framework and scope of the market being redefined and amended by different market forces.
The Pan Asia Securities Lending Association is among the regional stakeholders actively working to get the lending and short selling facility up and running.
Now read: Securities Finance Times Asia Handbook 2020
While there are no more pending issues with regards to the short selling capabilities currently in the pipeline, there is a lot riding on the securities borrowing and lending programme, SFT understands.
A PSE spokesperson says the exchange is working to address concerns raised by foreign participants regarding the market’s trading rules framework to make it viable for them to actively participate in the programme.
The rules and guidelines were initially approved by the Securities and Exchange Commission (SEC) in December 2019 but were subsequently sent back for revision upon feedback from market participants.
The PSE is waiting for the green light from the SEC on two key items before short selling can begin.
This includes approval of the Philippines Depository and Trust Corporation as an agent lender, and approval of identified offshore assets (securities and currencies) as collateral for foreign participants.
Elsewhere, the Bureau of Internal Revenue must approve the use of Global Master Securities Lending Agreement for foreign participants to replace the Philippines own MSLA.
The introduction of short selling into the Philippines market has faced repeated delays in recent years, with the framework and scope of the market being redefined and amended by different market forces.
The Pan Asia Securities Lending Association is among the regional stakeholders actively working to get the lending and short selling facility up and running.
Now read: Securities Finance Times Asia Handbook 2020
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