SFC Consults on expanding the scope of short position reporting
SFC Consults on Expanding Short Position Reporting Requirement
Introduction
The Securities and Futures Commission (SFC) published a consultation paper on 27 November 2015, proposing the expansion of the scope of the short position reporting regime and corresponding amendments to the Securities and Futures (Short Position Reporting) Rules (Short Position Reporting Rules).
The key changes proposed are:
- The extension of short position reporting to all securities, including collective investment schemes, determined by The Stock Exchange of Hong Kong Limited (SEHK) to be Designated Securities (i.e. securities that can be short sold under the rules of SEHK);
- The reporting threshold for Designated Securities that are stocks will remain the same – i.e. the lower of 0.02% of the stock’s market capitalisation, or HK$30 million;
- The reporting threshold for Designated Securities that are collective investment schemes will be HK$30 million;
- To determine the value of a net short position where a Designated Security’s closing price is in a foreign currency, it must first be converted into Hong Kong dollars at the specified rate for that currency; and
- Daily reporting will apply in contingency situations to those Designated Securities specified by the SFC in a public note. Read more