CHINA: China short selling to be permitted through China Stock Connect from March

Friday February 20 2015

The Stock Exchange of Hong Kong has announced that China short selling will be permitted through the trading link of Shanghai-Hong Kong Stock Connect.

The Securities and Futures Commission has approved the amendments to the Rules of the Exchange in relation to short selling of China Connect Securities. The short selling of eligible China Connect Securities (“Short Selling Security”) will be allowed starting 2 March 2015 and the list of Short Selling Securities can be found on the HKEx website. Currently there are 414 securities on this list.

Short sales will be required to be covered – naked short selling will not be permitted. Uptick rules will apply whereby a short selling order shall not be input at a price lower than the most recent execution price for that security.

The short selling ratio for any short selling security shall not exceed 1% on any China Stock Connect trading day, and the cumulative short selling ratios for a short selling security in any period of 10 consecutive CSC trading days shall not exceed 5%. Any short selling order that, if executed, will cause the 1% daily limit or the 5% cumulative limit for a security to be exceeded during the course of a CSC trading day will be rejected by the CSC.

Click on the above link for more details.