| HONG KONG
HONG KONG Dec 15 Singapore has proposed new
rules that would require investors to report short sales of
shares - a further sign authorities are stepping up scrutiny of
investors who take a negative view on listed companies and
aggressively sell their shares.
The consultation paper published by the Monetary Authority
of Singapore (MAS) on Wednesday follows a similar proposal by
Hong Kong's Securities and Futures Commission (SFC) last year,
and comes amid a growing number of public short-selling
campaigns against listed companies in the region.
Short selling involves the sale of a security that the
seller does not own, or has borrowed, believing that the
security's price will decline so that it can be profitably
bought back at a lower price.
MAS said short selling "can enhance the price discovery
process and maintain market discipline", but its proposals aimed
to enhance transparency by requiring market participants to mark
short-sell orders to the exchange and report short positions
above a certain threshold to the MAS.
Aggregate information on short sell orders and short
positions would be published, the MAS said.
Singapore is one of several markets, which include Hong Kong
and Japan, that have been subject to campaigns by short-sell
research firms over the past two years.
There were three such raids this week alone in Hong Kong
Last year, Singapore-listed Noble Group became one of the
highest-profile subjects of short selling, with Muddy Waters
saying it was shorting the stock due to concerns over the
commodities trading firm's financials.
Regulators and companies in Asia are increasingly pushing
back against such campaigns, with Hong Kong's SFC successfully
banning U.S. short-seller Andrew Left from the Hong Kong market
in October following his 2012 report on China's Evergrande.
MAS said the regulations would bring Singapore in line with
international short-selling guidelines.
The proposed MAS rules would apply to the immediate legal
owners of the stocks, while designated market makers would be
exempt. The MAS said it intends to give the industry four months
to implement the new rules, once they are finally published.
The consultation closes on January 27.
Reportable positions include those equivalent to or more
than 0.05 percent of eligible shares or S$1,000,000 ($700,000)
in aggregate value.
(Reporting by Michelle Price; Editing by Eric Meijer)