Singapore Short Selling Reporting Rules to take effect on 01 October 2018

The Monetary Authority of Singapore (MAS) issued the Securities and Futures (Short Selling) Regulations 2018 (Regulations) and the Guidelines on the Regulation of Short Selling (Guidelines) on 28 May 2018. The Regulations will come into force on 01 October 2018.

The latest Regulations and Guidelines can be found below:

Read the full Regulations

Read the full Guidelines

Products in scope

The short selling reporting rules apply to “specified capital markets products”, namely:

• shares of a listed corporation
• units in a listed business trust, and
• units in a real estate investment trust.

Disclosure requirements

Short sell orders for specified capital markets products must be disclosed to the Singapore Exchange (SGX). Currently, brokers and banks are already required to mark short sell orders to the SGX pursuant to the SGX’s trading rules, and the new Regulations will now provide for statutory backing to this requirement.

Short position reporting

The new rules also require that significant short positions in specified capital markets products must be reported to the MAS (discussed below).

Section 137ZK of the Securities and Futures Act (Cap. 289) of Singapore (SFA) read with regulation 8 of the Regulations requires a person to report its short positions in any specified capital markets products to the MAS if the short position is equivalent to or exceeds the short position threshold.

The short position threshold is defined to be the lower of:

• 0.2% of the total issued shares in the relevant class of shares or units in the relevant class of units of a business trust or real estate investment trust, or
• S$2,000,000 in aggregate value.

Such report should be made to the MAS within two business days after the position day, being the last trading day of each week, by lodging a Short Position Reporting Form through a new online portal known as the Short Position Reporting System (SPRS). This means that if the position day is a Friday, the Short Position Reporting Form must be lodged by the following Tuesday (assuming no public holidays in that week).

The MAS will publish aggregated short positions of each security on Wednesday of each week, without disclosing the identities of short sellers. Market participants can access the SPRS and familiarise themselves with the system before mandatory reporting commences on 01 October 2018.

Persons with reporting responsibility

The MAS clarified in the Guidelines that the statutory duty to report short positions lies with the persons legally responsible for the delivery of specified capital markets products that may result in those short positions. In other words, in the case of a trust or unit trust, the obligation to report short positions lies with the trustee, and not the manager or the unitholders. Similarly, for funds structured as companies, the reporting obligation would fall on the fund.