After the 2008 financial crisis, we’ve been observing a surge in reporting rules set by the regulatory authorities and IOSCO (International Organisation of Securities Commission). These rules are designed to help identify disparities in trading methodologies; especially those followed in short sells, because of the potential for undesirable effects on market participants’ trading attitudes and to avoid market turbulences.
Based on IOSCO’s consultation report, “Regulation of Short Selling,” the Monetary Authority of Singapore (MAS) issued reporting requirements in 2018, titled “Securities and Futures (Short Selling) Regulations 2018.” These requirements outline reporting rules to enhance transparency on the short selling of securities listed on Singapore’s approved exchanges.
Here are some of the key pieces of MAS’ regulation:
Regulation Overview
The reporting of short positions in securities listed on the Singapore Exchange (SGX) is effective from Oct. 1, 2018.
MAS established a new online portal, which allows investors to submit information regarding short positions that they hold above a specified threshold. These aggregated short positions will then be published by MAS on the third business day after position day each week.
In addition to some static information, details of the Stock code and quantity of short shares must also be provided. However, there will be no disclosure regarding the identity of the short sellers.
Reporting Requirements
Per the guidelines, the following specified capital market products listed on an approved exchange are to be reported:
- Any share of a corporation
- Any unit in a business trust
- Any unit in a real estate investment trust
The short position threshold is the lower of:
- 0.2 percent of total issued shares in the relevant class of shares or units; or
- Having a market value equal to or greater than SGD$ 2,000,000.
The investor with such a short position must disclose it to MAS by lodging a Short Position Reporting Form within two business days after position day (likely Friday).
A third party reporting agent (individual or corporation) can report the short positions on behalf of the investor.
SS&C GlobeOp helps fund managers, global asset managers and financial services firms meet worldwide regulatory requirements by providing data aggregation, expert analysis, reporting and transparency. Our product suite covers AIFMD – Annex IV, Form PF, Basel III, CPO/PQR, EMIR, Form 13F, OPERA, Solvency and TIC Reporting.
