The Monetary Authority of Singapore (MAS) has announced that it will require investors to report their short positions and short sell orders in securities listed on the Singapore Exchange (SGX), with effect from 1 October 2018. This will improve transparency on short selling activities in the securities market and enable investors to make more informed trading decisions.
Under the new rules, investors with short positions above a specified threshold will have to report these positions to MAS through a new online portal, the Short Position Reporting System (SPRS). MAS will publish aggregated short positions of each security on Wednesday of each week. Identities of short sellers will not be disclosed. With immediate effect, market participants can access the SPRS and familiarise themselves with the system before mandatory reporting commences on 1 October 2018.
The new rules will also provide statutory backing to SGX’s trading rules which already require securities brokers and banks to flag all investor short sell orders to the exchange. There will be no change to the current arrangement for investors to inform their brokers when they submit short sell orders. SGX will continue to consolidate the short sell orders of each security and publish the information daily.
The new requirements will be effected through the Securities and Futures (Short Selling) Regulations 2018. MAS previously consulted on the Regulations and the response to the consultation can be found here.
Short selling is the sale of securities that the seller does not own at the time of the sale. A short sell order arises where a seller does not have an interest in the securities at the time the sell order is made. A short position arises where a person does not have an interest in the securities that the person has to deliver.