Malaysia – BML Introduces Intraday Short Selling

On 16 April, BML introduced intraday short selling for investors.

  • Implemented Intraday Short Selling (IDSS) for all investors to boost market liquidity.


  • Exchange has implemented a clear framework, to facilitate IDSS trades for investors.
  • Under framework, investors will be able to sell securities first, and buy the securities
    later within trading day itself. IDSS can be done on selected list of eligible securities.
  • List of approved securities, currently with 280 securities, be reviewed every 6 months.
  • Exchange will continue to undertake initiatives to give more efficient and facilitative
    market framework and the introduction of IDSS is set to further advance the efforts.
  • Robust compliance requirement and safeguards, have also been put in place to allow
    for IDSS trades, including controls for IDSS suspensions if stock price falls over 15%.
  • Framework also specifies compliance obligation requirements for investors before IDSS.
  • To allow investors to carry out IDSS, Exchange has amended Rules of Bursa Securities,
    Directives and Participating Organisations’ Trading Manual, approved by Commission.

India – SEBI FPI Government Limits

On 12 April, SEBI updated FPIs investment limit in government debt.

  • A sub-limit for investment by long term foreign portfolio investors (FPIs) in the
    infrastructure sector was created within corporate debt investment limit (CDIL).

Revised Limits

  • Decided to revise the CDIL and the limit for investment by FPIs in Government
    Securities and State development loans, for the year 2018-19.
  • Limit for FPIs in Central Government securities will be enhanced to INR 207,300
    on 12 April 2018 and INR 223,300 on 1 October 2018 respectively up from existing.
  • Limit for long term FPIs sovereign wealth funds, multilateral agency, endowment
    Funds, etc enhanced to INR 78,700 on 12 April 2018 and INR 92,300 on 1 October .
  • SDL-General to be enhanced to INR 34,800 cr on Apr. 12, 2018 and INR 38,100
    cr on 1 October 2018 respectively, SDL-Long Term to be revised to INR 7,100.
  • CDIL to be enhanced to INR 266,700 cr on 12 April, and INR 289,100cr on 1 October.

E.U. – ESMA Short-Disclosure Impact

On 13 April, ESMA issued study on impact of short-sale disclosures.

  • ESMA study showed the impact of short-selling disclosure on investor behaviour.
  • Analysed net short positions reported under the Short-Selling Regulation (SSR).
  • Published in ESMA’s latest trends, risks, vulnerabilities (TRV) report No. 1, 2018.

SSR Treatment

  • SSR requires public disclosure of net short over 0.5% of company issued shares.
  • Firms must also report to authorities shorts above 0.2%, and each further 0.1%.
  • SSR aims to reduce settlement and other risk on uncovered or naked short-sale.
  • Regulation came into force in 2012 and ESMA, in December 2017, advised on revision.

ESMA 2018 Findings

  • Found 210,341 net short positions were reported, from January 2013 to December 2016.
  • Short positions on over 2,000 European shares, majority being UK and German.
  • ESMA analysis revealed around 1,000 different investors are active in EU shares.
  • Large majority is domiciled in US (40%), UK (30%), and only 15% in rest of EU.
  • Short-selling is highly concentrated, 150 investors account for 80% of positions.
  • Investors avoid crossing public disclosure threshold to keep their strategy secret.
  • Disclosure of large shorts might reinforce herd behaviour in short-sale activities.

E.U. – ESMA Commodity Position Limit

On 9 April, EU ESMA issued opinion agreed position limits per MIFID.

  • Follows ESMA October 2017 opinion on FCA commodity position limits.

2018 Updates

  • ESMA opinions agreed position limit re feed wheat; jet kerosene; and gasoline.
  • Found proposed limits consistent with objectives of MiFID II, and methodology.
  • ESMA will continue to assess notifications received and issue opinions on them.
  • To ensure the position limits are set in accordance with the MiFID II framework.

Commodity Limits

  • MiFID II requires that all commodity derivatives traded on trade venues as well
    as economically equivalent OTC contracts, must be subjected to a position limit.
  • NCAs have to establish position limit with methodology for calculation by ESMA
  • For illiquid contracts, spot and other months’ limits are set by default in RTS 21
    and amount to 2,500 lots, or 2.5mn securities issued for securitized derivatives.
  • Liquid contracts will be given bespoke position limits, set by the relevant NCAs.

Ireland – CBOI Proposes UCITS Regulations Update

On 29 March, CBOI proposed amendments to the UCITS regulation.

  • CBOI undertook to keep UCITS regulations under review, and to update periodically.
  • In the process of the annual review, a number of amendments have been identified.
  • Proposed to incorporate previous amendments into consolidated version of the rules.

Format of Consultation

  • Section I contains details of the amendments, taking account of CBOI 2017 review.
  • Section II on implementation of ESMA’s Opinion to NCAs on Share Classes of UCITS.
  • Section III introduces obligations regarding UCITS charging performance related fee.
  • Section IV sets out amendments, as a result of the MMFR, in force on 20 July 2017.

CBOI Review Amendments

  • Take account of CRR implementation, when assess equivalence of third country bank.
  • Holding of ancillary liquidity applies in case of any single bank, to remove ambiguity.
  • 18-month requirement for first annual audit applies to umbrella UCITS, and subfunds.
  • Remove duplication of requirements, for maintenance of company secretary material.


  • Comments on consultation should be received by 29 June 2018.


E.U. – ESMA Commodity Limits FAQ Updated

On 27 March 2018, ESMA updated its FAQs on commodity derivatives under MiFID II.

  • FAQ on position limits clarified circumstances under which less liquid contracts may
    receive bespoke limits, established by relevant national competent authority (NCA).
  • With a new approach to development and application of limits for spread contracts.
  • The spread positions are disaggregated, and the subsequent individual constituent
    positions were then added to the relevant overall position for the relevant contract.
  • FAQ on position reporting clarifies to which NCA positions in OTC derivative contract,
    which is economically equivalent to more than one ETD contract, must be reported.
  • When ETD contracts are not the same contract as defined in Article 5(1) of RTS 21.

Canada – IIROC Short Position Calculation

On 22 March, IIROC issued guidance on short position calculation.

  • Participants, Access Persons must file short position reports, per UMIR 10.10.
  • Follows IIROC Dec. 2017 notice on calculation and reporting of short position.
  • Calculate and file report of short positions in each listed and quoted security.
  • Report as of the 15th day, and the last day of each month, (calculation date).
  • Process to file short position report with IIROC, and the expectations on filing.

Aggregate Reporting

  • Report aggregate short position of security from holding in separate account,
  • Calculate short position from each account separately; and not net positions
    from more than one account even where accounts for same beneficial owner.
  • Inclusion of odd-lot short positions, in calculation of reported short positions.
  • Calculate short positions using settlement date positions, (not on trade date).

Convertible Securities

  • A short position in a listed or quoted security which is covered by the holding
    of a convertible or exchangeable security, is still considered as short position.
  • This short position must be reported until the convertible has been tendered,
    or account holder has issued irrevocable instructions to convert or exchange.


  • Effective date of guidance for short position reporting is November 30, 2018.

U.S. – Nasdaq Position Limit on ETFs

On 22 March, Phlx, MIAX proposed rule on position limits for ETFs.

  • MIAX amended rule 307 on position limits, as well as rule 309 exercise limits.
  • PHLX amended section (A) of exchange rule 1001, relating to position limits.


  • Increase position, exercise limits in options, on range exchange traded funds.
  • For options on the following ETFs: FXI, EEM, IWM, EFA, EWZ, TLT, QQQ, EWJ.
  • Said trade activity has been adversely impacted by the current position limits.
  • Limits have caused option trading in symbols to move from exchanges to OTC.
  • Are based on outstanding shares and trade volume of underlying stock or ETF.
  • Largest capitalized and most frequently traded had limit of 250,000 contracts.
  • Amendment would double the position and exercise limits, for stated symbols.
  • Such options to no longer be subject to standard position and exercise limits.


  • SEC approved rule, comment 21 days after publication in the federal register.

Japan – TSE Trading Contract Period

On 16 March, TSE expanded length of traded derivatives contracts.

  • Osaka Exchange will partially revise rules, to invigorate, enhance convenience.

Contract Months and Tick Sizes

  • The number of contract months of Nikkei 225 futures shall be increased to 19.
  • Also number of contract months of Nikkei 225 options shall be increased to 25.
  • Tick sizes for Nikkei 225 options will be set based on level of options premium.
  • English Agreement for setting up futures/options trading account.


  • These revisions are scheduled to be implemented from July 17, 2018.