HONG KONG: SFC consults on Hong Kong short selling legislation

Thursday May 26 2011

The Securities and Futures Commission has launched a consultation inviting the public to comment on proposed subsidiary legislation that will give effect to the Hong Kong short selling position reporting regime announced earlier in the Consultation Conclusions on Increasing Short Position Transparency.

Under the regime, a short position that reaches the threshold of 0.02% of the issued share capital of a listed company, or a market value of $30 million, whichever is lower, must be reported to the SFC on a weekly basis. In general it would be the party who beneficially owns the short position who would be responsible for the reporting. The reporting requirement will however only apply to the constituent stocks of the Hang Seng Index, the Hang Seng China Enterprises Index and other financial stocks specified by the SFC.The SFC will provide an electronic reporting facility and a template for reporting. Aggregated short positions of each stock will be published, on an anonymous basis, a week after the receipt of the reports.Interested parties are to submit comments to the SFC by 30 June 2011.

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