HK short selling announcement confounds market

Author: Ashley Lee | Published: 21 Aug 2013
  • In an August 1 Hong Kong's Securities and Futures Commission (SFC) announcement, titled 'Premature selling of placing shares may constitute illegal short selling', it was stated that investors might be illegally short selling if they sell shares before the placement is completed;
  • The SFC focused on the conditionality of the ownership of shares, as detailed in Section 170 of the Securities and Futures Ordinance;
  • The move could change market practice in Hong Kong as investors had previously sold their shares on a grey market before settlement;
  • The SFC has yet to reveal what prompted this announcement. It is also unclear what market interests the regulator is trying to protect. 

An August 1 announcement from Hong Kong's Securities and Futures Commission (SFC) is set to change the way...