SGX proposes short selling reporting measures

Source: Singapore Exchange

Singapore Exchange Limited ("SGX") currently publishes the daily list of buying-in securities and details of the prices and volumes of shares bought-in to keep the investing public informed of the short selling activities that fail delivery in our marketplace.

SGX is of the view that any information disclosed on short selling activities should be timely, not unduly burdensome and maintain commercial confidentiality.

To enhance transparency of the marketplace, the Exchange is seeking feedback from market participants on measures for wider reporting and disclosure of short selling activities.

The measures are:-

(i) Marking of Short Selling Orders, Publication of Short Selling Statistics

  • The marking of all selling orders for securities, including structured warrants and exchange-traded funds, to indicate short sales by the seller. Such marking is to be done by the broker or the customers at the point of order entry.
  • SGX is also proposing the publication of the aggregated number of short-selling orders transacted for individual securities on a daily basis. The marking of short-selling orders will facilitate the collation of data on short selling activities in Singapore.

(ii) Reporting Obligations on Substantial Short Positions

  • In addition, SGX is consulting on a possible requirement for holders of substantial short positions in individual securities to report their positions to the Exchange on a monthly basis. A threshold of one per cent (1%) is proposed as the determinant of a "substantial short position".

SGX is also mindful that a statutory framework will be required in order to place legal obligations on customers to declare short selling orders to their brokers, and for holders of substantial short positions to declare their holdings, should the proposed new measures be implemented.

Market participants and members of the public are encouraged to participate in this public consultation. The consultation paper will be easily accessible and available on from 27 November 2008 to 22 December 2008.

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