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Full Version: MAS issues new guidelines on short-selling disclosure
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By Wong Siew Ying | Posted: 09 January 2013 2135 hrs

SINGAPORE: The Monetary Authority of Singapore (MAS) has issued new guidelines on short-selling disclosure on Wednesday.

This follows an earlier announcement from the Singapore Exchange (SGX) on January 8 that it will enable tagging of securities orders which involve short selling from March 2013.

SGX will also be publishing daily reports on the total value and volume of short sales for each counter.

MAS said its guidelines clarify market participants' obligations to accurately disclose their short selling activities.

The central bank said information on short sale transactions help to deter market abuse by alerting authorities to activities that may potentially disrupt the orderly functioning of markets, and aids in investigation and enforcement.

However, it added that market participants should exercise care when interpreting information on short selling.

MAS said as information on short selling may be taken into account by other market participants when making trading decisions, all market participants are expected to accurately disclose the nature of their sell orders in compliance with SGX's rules on short selling disclosure.

It added that Singapore Exchange Securities Trading Limited (SGX-XT) will provide its Trading Members with a facility to correct erroneously marked sell orders.

MAS said under the Securities and Futures Act, it is an offence to make false or misleading statement to a securities exchange, futures exchange or designated clearing house.

If convicted, the offender could be dined up to S$50,000 or jailed for up to two years or both.

The central bank added that it will also consider whether there was intent to deceive in respect of sell orders that had been inaccurately marked by SGX-ST Trading Members or inaccurately disclosed by market participants.

Short selling is the sale of securities that the seller does not own at the time of the sale.

It can either be 'covered' or 'uncovered' or sometimes known as 'naked' short selling.

In 'covered' short selling, at the time of the sale, the seller has borrowed the securities or has made arrangements to fulfil his obligation to deliver the securities.

In 'uncovered' short selling, at the time of the sale, the seller is not in possession of securities or has not made arrangements to meet his delivery obligation.

- CNA/fa
Is this guideline unique in Singapore, or it is commonly deployed by other countries?
At least Taiwan and HK both have these disclosures
I hate to think it is a knee jerk reaction to olam vs MW. Why can't sgx be more proactive.