In a joint consultation paper ("Consultation Paper") issued by the Monetary Authority of Singapore ("MAS") and the Singapore Exchange Limited ("SGX") in February 2014 aimed at strengthening the securities market in Singapore, the MAS and SGX have proposed, amongst other measures, to introduce a short position reporting regime in Singapore.
Overview of short position reporting proposal
Singapore's policy stance on short selling recognizes the importance of short selling in maintaining market discipline; hence Singapore does not prohibit short selling. Instead, its potential disruptive effect is mitigated through other means, such as a short position marking regime. The short position marking regime was introduced in Singapore in March 2013, where participants are required to mark all short sell orders before submitting them to the SGX.
To further improve transparency on the price discovery process, the regulators have jointly proposed to complement the existing short position marking regime with a short position reporting regime. Under the proposed reporting regime, net short positions for all securities listed on the SGX Mainboard and Catalist which require delivery of underlying securities must be reported, including derivatives which could require delivery of an underlying security (e.g., exchange-listed options).
Two reporting options have been proposed in the Consultation Paper:
Summary of other key proposals in the Consultation Paper
Below is a summary of the other key proposals set out in the Consultation Paper:
The Consultation Paper may be accessed through the following website:http://www.mas.gov.sg/~/media/MAS/News%20and%20Publications/Consultation%20Papers/Review%20of%20Securities%20Market%20Structure%20and%20Practices.pdf
Invitation for comments
The regulators have invited comments on their proposal to introduce short position reporting and the effectiveness and drawbacks of the two proposed reporting options set out above, as well as on the other proposals in the Consultation Paper. The deadline for comments and feedback to be submitted is May 2, 2014.