On 2 January 2020, PHI SEC cleared CMIC guidelines on short selling.
- PHI SEC has cleared Capital Markets Integrity Corporation’s (CMIC) implementing guidelines on securities borrowing and lending (SBL) and short selling.
- Approved 17 December 2019 subject to adoption of certain amendments outlined by SEC.
- Philippine Stock Exchange shall remain responsible for and retain full jurisdiction over implementation and enforcement of trading rules on short selling as per agreement.
- Guidelines address concerns over effect of SBL/short selling on trading participants’ books and records, error transactions, risk-based capital adequacy ratio (RBCA).
- Reiterates that short sale transactions shall be limited to eligible securities, referring to securities of companies comprising the PSE index and to exchange traded funds.
- Also reiterates prohibition on naked short selling and recording of lending of securities.
- Outlines impact of movements in trading participants’ accounts on RBCA requirement.
- Requires submission of bi-annual summary reports of outstanding and liquidated SBL transactions and stock returns, and a certification of submission of said reports.