Hong Kong investors gain short position reporting tools
Financial technology providers TORA and Linedata have
separately released two solutions designed to meet the Hong Kong Securities and
Futures Commission (SFC) new requirements for disclosing short positions.
The new rules took effect on 18 June, with the first
reporting date of net short positions on 22 June and a T+2 reporting deadline
set for 26 June. Net short positions are to be reported weekly, with a contingency
for the SFC to enforce daily reporting in the event of a rapid market decline
or other sudden event.
TORA has introduced a solution that allows hedge funds to
create a consolidated report of short positions that comply with both the SFC’s
approved list of equities that can be shorted and the newly prescribed
reporting thresholds. The tool integrates with the TORA Compass execution and
order management platform to generate reports on demand or scheduled reports
for the weekly or daily requirement set by the SFC.
“The new requirements are part of a growing trend of
regulators seeking to capture increased data to help in their role, which
includes developing a deeper understanding of market behaviour,” said Chris
Jenkins, TORA’s managing director for Asia Pacific. “This also prompted TORA to
introduce a solution for hedge funds to meet regulatory obligations when
trading domestic equities.”
Meanwhile, Linedata offers a report which, as required by the
SFC, details whether a stock is on the short selling list and needs to be
reported; whether the position is equivalent to HK$30 million, or whether it is
equivalent to 0.02% of share capital. Customers are also offered a more
detailed report for their own use.
“The robust, centralised database in Linedata Beauchamp
means that all the data needed to meet this new reporting requirement is there
and we have created these two reports to streamline the process, saving our
clients time and effort,” said Sally Crane, Linedata’s managing director for
Asia Pacific. “Linedata Beauchamp is a flexible, configurable system which
enables either the client or us to quickly adapt to new regulations and other
reporting and compliance requirements with ease.”