SEC fine tuning short selling rules more

MANILA  -The Securities and Exchange Commission (SEC) is fine-tuning the guidelines for short-selling as it studies frameworks across the region.

The long-delayed implementation of short-selling, which allows investors to profit from a drop in a company’s share price, could happen before the end of the year, the SEC had previously said.

“We are pushing to align the short selling environment with the major Asian markets, which has the potential to promote liquidity, stabilize the market, protect investors, and further unlock the value of shares of Philippine corporations,” SEC Chair Emilio B. Aquino said in a statement on Monday.

“We will balance our role as regulator and market innovator, imposing the necessary restrictions and safeguards while ensuring that they will not stifle investors and trading participants from fully taking advantage of this trading strategy,” he added.

The SEC is looking at the adoption of short-selling practices across regional markets where it is allowed such as in Singapore, Hong Kong, Malaysia, Thailand and Indonesia, among others.

“The SEC is also considering requiring the submission of a regular report on all short selling and securities borrowing and lending activities and their compliance with current rules and policies, to better guide the Commission on policies on short selling moving forward,” the corporate regulator said.

The SEC said it already approved guidelines that will facilitate the conduct of short selling in the local market.

In 2018, the Commission cleared the Philippine Stock Exchange’s guidelines on short selling transactions.

This covered the top 30 listed Philippine companies comprising the PSE Index and exchange-traded funds. Companies must also maintain a ratio of short interest to outstanding shares of at least 10 percent.

SEC Commissioner Kelvin Lester K. Lee earlier said that taxation issues needed to be cleared with the Bureau of Internal Revenue to make short selling viable for investors.