Global Short Selling Regulation

An overview of some of the most complex jurisdictions for short-selling around the world

European Short Selling (EU SSR):

  • Introduced in 2012, ESMA’s regulation on short selling aims to increase the transparency of short positions held by EU Member States. 
  • In response to the COVID-19 pandemic, the disclosure threshold was lowered to 0.1%. Although this reverted back to 0.2% in March 2021, EU member states recently adopted a delegated regulation amending the threshold for the notification of net short position in shares under the EU Short Selling Regulation from 0.2% to 0.1%. The date this will take effect is to be determined. 
  • Any short positions above 0.5% will be made public.

Hong Kong Short Selling:

  • In Hong Kong, the reportable short position threshold is the lower of HK$30 million or 0.02% of the value of the total number of designated securities issued by the corporation concerned. For collective investment schemes, only the threshold of HK$30 million is applicable.
  • Short positions need to be reported to the Securities and Futures Commission (SFC). 

Singapore Short Selling:

  • All short sell orders must be submitted to the Singapore Exchange (SGX). If they cross a threshold, investors also need to report their short positions to the Monetary Authority of Singapore (MAS). This threshold is currently defined as the lower of 0.2% of the total issued shares/units in the relevant class, or SG2 million in aggregated value (closing price on position day).
  • The position day is the last day of each calendar week on which the SGX-ST is open for trading in the relevant class of specified capital markets product. 

Japan Short Selling:

  • In Japan, there are two thresholds that trigger short selling reporting: 1.  A net short sale position of 0.2% (and more than 50 short selling units) must be reported to the exchange  2. A net short sale position 0.5% (and more than 50 short selling units) must be reported to the exchange will trigger the public disclosure requirement fulfilled by the exchange.
  • These thresholds apply to covered short-selling only - naked short-selling is prohibited.

South Korea Short Selling:

  • Short position reporting in South Korea is required where positions (i) exceed market value of KRW 1 billion or more or (ii) the net short position is 0.01% or more of the number of shares of a company listed on the KRX and which has a market value of more than KRW 100 million. Each share class and type requires its own calculation.
  • Short positions of 0.5% or more of the number of shares (of each type and class) listed on the KRX will be made public.

Australian Short Selling:

  • A covered short position must be disclosed to ASIC on each day that the position is held, unless a position is valued at less than or equal to $100,000 and is of a size less than or equal to 0.01% of the product's total quoted securities. Each product type is subject to its own calculation by product and class. For more information on short positions reporting in Australia please see here.
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