I THANK Mr Koh Cheng Soon for sharing his concerns on the low volatility and resultant low turnover of our stock market (Market regulatory framework favours short-sellers; Nov 1). To address such sentiments, the Singapore Exchange (SGX) has stepped up efforts to engage brokers and the media on various aspects of the market. These include measures such as improvements in market quality following a reduction of clearing fees and the introduction of a market-making programme for up to 10 per cent of SGX-listed stocks. The regulatory framework is fair in its treatment of both investors going long and selling short. Public queries are issued to companies in instances of sudden share price rises or drops. Circuit-breakers also apply in both instances. Also, a short-seller must deliver shares following a short-sale, or face a penalty. A long-investor can buy shares without paying the full amount for up to three days after the purchase, but a short-seller must cover his position during the day or borrow shares. While there is no reporting requirement for long trades apart from trades in excess of 5 per cent, or by shareholders holding 5 per cent or more of the company, brokers are required to flag all short trades with daily results published on the SGXs website.
Posted on: Fri, 14 Nov 2014 03:14:55 +0000
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