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.”