The Hong Kong Securities and Futures Commission (SCF) will run a pilot test of the Short Position Reporting Service from 11 January to 10 March  2017, in order to facilitate market participants’ preparations for the expanded short position reporting requirements.

With effect from March 2015, reporting will be required for reportable short positions in all designated securities eligible for short selling, specified by the Hong Kong Stock Exchange.

SCF reminded market participants in a release on 30 September to ensure that they have systems and procedures in place to comply with the new requirements.

South Korea

South Korea’s financial regulator unveiled a set of tougher measures on short selling last month. Stocks with a sudden and abnormal increase of short-sale transactions will be classified as so-called “overheated stocks” and will be banned from further short-selling on the following day.

KRX, South Korea’s exchange, will designate overheated stocks at market close to prohibit short selling during the next day’s trading session.

Deadlines for reporting and disclose of short positions will also be shortened from the current T+3 days to T+2 days, according to a statement from the Financial Services Commission (FSC).

It is expected that the changes will come into force in early 2017 along with heftier fines for those that breach the rules.

The FSC’s moves follows heavy losses for investors of Hanmi Pharmaceutical due to massive short-selling before the company disclosed on September 30 that is contract with Boehringer Ingelheim broke down.

At the time of the global financial crisis, South Korea banned all short selling. The ban was lifted for most companies in June 2009 and restrictions on financial stocks were loosened in 2013.