Regulated Short Selling 
21/07/2017 
 

Major Requirements

Regulated short selling orders on HKEX’s securities market (“the Exchange”) must:

  • Be covered short sale (Exchange Participants who conduct short selling transaction must have the presently exercisable and unconditional right to vest the security in the purchaser); 
       
  • Be placed only on Designated Securities eligible for short selling;
       
  • Be automatically struck through the Exchange’s system, both during the Continuous Trading Session (CTS), and during the Closing Auction Session (CAS);
       
  • Observe “tick rule”,i.e., a short sale order of a Designated Security shall not be made on the Exchange below the prevailing ask price during CTS, or the CAS Reference Price during CAS; 
       
  • Comply at all times with the Securities and Futures Ordinance, and the regulations regarding short selling in Schedule 11 of the Rules of the Exchange;

With the exception of Securities Market Maker Short Selling by a Securities Market Maker, Structured Product Liquidity Provider Short Selling by a Structured Product Liquidity Provider, Designated Index Arbitrage Short Selling by a Designated Index Arbitrage Short Selling Participant, Stock Futures Hedging Short Selling by a Designated Stock Futures Hedging Short Selling Participant, Structured Product Hedging Short Selling by a Structured Product Hedging Participant and Options Hedging Short Selling by a Market Maker or an Options Hedging Participant (please refer to Schedules 14, 15 and 18 of the Rules of the Exchange for details). 

 

Designated Securities Eligible for Short Selling

The list of Designated Securities for short selling is revised on quarterly basis. (A full list of Designated Securities is posted under "Designated Securities Eligible for Short Selling"). Please refer to Schedule 11 of the Rules of the Exchange for the selection criteria for Designated Securities.

 

Definitions

"short selling" or "short sale"

Please refer to Schedule 11 of the Rules of the Exchange

"Structured Product Hedging Short Selling", "Structured Product Liquidity Provider Short Selling", "Designated Index Arbitrage Short Selling", "Options Hedging Short Selling", "Securities Market Maker Short Selling", "Stock Futures Hedging Short Selling"

Please refer to Chapter 1 of the Rules of the Exchange