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New rules for Naked Short Sell starting 25Sep2008

I think SGX is themselves short of implementing regulations - they only know how to fine Investors (be it genuine mistake or otherwise).

As correctly  pointed out by an investor, Mr Denis Distant, in the BT today that SGX trading system should be modified to link to the CDP so that all online sale orders are checked for scripts availability before being passed into the system. Don't wait too long SGX! Cheers!

 

SGX says investor must be "on the dot" for executing trade, thus, if one made mistake just pay for it. Anyway, ss ban will be review in a months time. Frankly, I do not ss, and hate to do it. This is not investing but gambling.

 

 Let's say we key wrongly how ah ??

 

Let's put thing in proper perspective. We all put our money in the Stock Market in hope of making money. There're a lot of instruements in the Stock Market to put your money in. Therefore, your investment strategy should be based on your knowledge of the instruemets available and of course, on your own comfort level. As a result, you would have many different type of Participants - long, short, buy&hold till thy kingdom come, buy on tips, hit&run..etc...

Frankly, it not easy to be able to short the Market. You've to know the exact timing and the environments prevailing and also the situation of the Coy you intend to short..........and of course the guts to believe that you're right! Most of the time, you noticed that The Shortists will go for Companies that're over-valued by The Market and try to bring the px down to 'reasonable' valuations and indirectly prevent an over-heated Market. Shortists are Traders too. As such, the could also be longs as well as shorts - this is their strategy to maximize margings! Cheers!

 

 

 

same here bro...i never short....only done once with i key in wrongly.......

AK_Francis      ( Date: 25-Sep-2008 00:45) Posted: AK opine that shorting is not a good game in stock investment, esp for the small retailers, like us.

 

yes,,,,,,,,,,,,,,,,,i dun like short,,,,,,,,,,,,,bec very hight risk to catch by trader,,,,,,,,,,,,,,,,,,,we always loose one,,,,,,,,,,,,,,,,,i rather sell off,,,,cut lost ....and stay alideway wait for buy back,,,,,,,,,,,,,,,,,,,,,,,,unlease i make mistake oversold or key wrong button,,,,,,,,,,,,,,,,,,,,,,,,,,or use cpf to sell than buy ammendment convert to cash if can have a profit

 

AK opine that shorting is not a good game in stock investment, esp for the small retailers, like us.

 

 

SGX ENHANCES TRANSPARENCY AND DETERS FAILED SHARE DELIVERY

22 September 2008 - Despite current market turbulence and global financial uncertainties, trading of securities listed on Singapore Exchange (SGX) has been orderly and settlement has been timely. Nevertheless, SGX would like to enhance existing transparency in the market and to deter failed deliveries.

Information about naked short positions which result in failure of delivery to CDP would be useful to market participants. Furthermore, cumulative short-selling of individual share securities without the discipline of borrowing to cover delivery obligations, may threaten the orderliness of our market with implications for the integrity of the clearing system. In Singapore, naked short selling which results in failed delivery to CDP are closed-out by buying-in from the market. Buying-in takes place from 11.30am every day.

With immediate effect, SGX will publish the list of buying-in securities and the volume of shares sought, at 11am every day. Publication will be done via SGXNET and SGX website. This will make dissemination of information more efficient than the present practice of having the information relayed through brokers who participate in the buying-in market.

After completion of buying-in, SGX will publish the list of securities bought-in (which includes individual counters), the volume and dollar-value at 8:30 am the following business day.

In addition to the current processing fee for buying-in of $30 per contract, there will be a penalty of 5% of the value of the failed trade subject to a minimum of $1,000. This penalty will take effect for trades executed from Thursday 25 September 2008 onwards. The fee will be reviewed from time to time to assess its effectiveness.

Market participants must not short-sell in the buying-in market as it runs counter to the objective of buying-in. Accordingly, any failure to deliver shares in the buying-in market may be liable to penalty of $50,000 and/or disbarment from participating in the buying-in market. This will take effect from Thursday, 25 September 2008.

The measures introduced today will be reviewed after a month. SGX remains vigilant in maintaining the orderly functioning of the market and safe efficient clearing.

 

buy PUT warrant of counter [which one wanna 2 short] is the alternative......if one feels the counter wud fall [on the day itself or nearing warrant's expiry date]. 

Farmer      ( Date: 24-Sep-2008 12:48) Posted: In short, the new rule to regulate ss by SGX is indeed harsh....it leave little room for shortists other than borrow to short. My broker's advice is harsh oso : "DO NOT SHORT SELL!!!"

 

Indeed, I'm against shorting without scripts. If one wants to short, must borrow scripts first. Just like a fish market, to sell fish, you need to have fish. If no fish, must borrow at a price first.

However, one question is that what if someone keys in wrong order, Buy becomes sell?? According to the new rule, he will be penalise with 1k!! Wow, a lot!

 

Farmer      ( Date: 24-Sep-2008 12:48) Posted: In short, the new rule to regulate ss by SGX is indeed harsh....it leave little room for shortists other than borrow to short. My broker's advice is harsh oso : "DO NOT SHORT SELL!!!"

 

Pple who short Yanlord today wasn't that lucky.......retail investor min. 1K on top of all the charges.  BB subject to penalty of 50K.

 

 

sianz84      ( Date: 24-Sep-2008 22:05) Posted: So that means as long as we short and cover back on the same day, we won't be penalised?

 

So that means as long as we short and cover back on the same day, we won't be penalised?

 

OK, thanks for the clarification ten4one =)

 

I think also very hard to borrow shares to short......

In US case, Pension Fund stop lending shares for non-finanical cpy.

knightrider      ( Date: 24-Sep-2008 17:04) Posted: Hi All, I think I make a mistake in the new rule : The correct one is Short Selling needs to cover up before the market close everytime they naked shorted the counter by 5pm daily, still remain the same (Day1). If one who left it open, the next day SGX will announced at 11am, what are the counters need to force buy back, then by 11:30 am, the share will be force buy back (Day2). Then the following day morning (the 3rd day at 8.30am, SGX ) will announce the previous day, what is the volume of the counters force buy-in !!! Pls correct me, if I am wrong. Thks!

 

herryr, as long as you've shares freely available with CDP, your sell order will not be affected by the 'shorting' circulation. Make sure you don't sell more than you have, else you'll have a hard time explaining to them ' the mistake'. Cheers!

 

Hi All,

I think I make a mistake in the new rule : The correct one is Short Selling needs to cover up before the market close everytime they naked shorted the counter by 5pm daily, still remain the same (Day1). If one who left it open, the next day SGX will announced at 11am, what are the counters need to force buy back, then by 11:30 am, the share will be force buy back (Day2). Then the following day morning (the 3rd day at 8.30am, SGX ) will announce the previous day, what is the volume of the counters force buy-in !!!

Pls correct me, if I am wrong. Thks! 

 

So it is clear now that shortlist is behind the fall in S-shares.......Almost all S-shares have fanastic gain...SinoTechfibe up 5 cts....WOW...

 

 

 

Could someone just confirm this, The conventional way of trading i.e. buy first, and only sell the stocks that you own, isn't affected by the new SGX regulation at all? I find the circulation a bit hard to digest, partyly due to the fact that I never short-sell before ... Thanks ...

 

The big hedge funds will have problem to cover their open positions. Small Players should be ok.

Anyway, if that's the case, time to position yourself for a quicky! Cheers!

 

I guess goverment ask them to act !!