New Short Position Reporting Regime In Hong Kong

A new reporting regime for holders of net short positions in shares traded on the Hong Kong Stock Exchange is proposed to come into effect on 18 June 2012.

Hong Kong already has a stringent short selling regime that was introduced after the market turmoil of the 1998 Asian Financial Crisis (only "covered" short selling is now permitted subject to the seller meeting certain eligibility requirements). Following the Lehman collapse in September 2008, the Securities and Futures Commission (SFC) considered it unnecessary to make any immediate changes to the existing regime, unlike regulators in some other markets where short selling activities were either restricted or banned. Instead, in 2009, the SFC embarked on a market consultation process with a proposal to make short selling activities more transparent to the SFC.