Approaching the finish line: Short position reporting

The SFC has issued a third consultation on its proposed new short position reporting regime, together with conclusions on its May 2011 consultation. It now seeks comment by 4 November 2011 on amended draft rules requiring weekly reporting of short positions on a net basis – rather than gross, as previously proposed. The consultation paper is available here:

https://www.sfc.hk/sfcConsultation/EN/sfcConsultMainServlet?name=ShtPostRptRulesConcl

Reporting on a net basis

Under the SFC's amended draft rules, short positions are to be calculated as the number of shares sold short, minus the number of shares beneficially held. The rationale is that this will enable some holders of short positions to develop reporting systems based on systems they already have for collecting net position data. The SFC concluded, "requiring the firms to report short position on a gross basis as originally proposed would take longer to implement".