SGX-ST Rules amendments in March 2013: Implementing measures for the marking of short sell orders and publication of short selling statistics

26 February 2013

Myra Tan

The Singapore Stock Exchange (SGX) has recently announced impending amendments to the SGX-ST Rules (new SGX-ST Rules) to allow for greater transparency to the market of short selling activities by:

  • establishing a new disclosure regime to facilitate the marking of sell orders on the securities market; and

  • allowing the SGX to publish aggregate short-selling information at the start of each trading day on its website, based on the short sale order data collected the previous trading day.

The new SGX-ST rules will be implemented from 11 March 2013.

Marking of Sell Orders

The new SGX-ST Rules require a seller of securities to mark his sell order as a normal sell order or a Short Sell Order at the point of order entry. Market participants are expected to split partial short orders where they do not own the full quantity of securities to be sold into two separate orders with the “Short Sell Order” marked accordingly.

A “Short Sell Order” is defined in the new SGX-ST Rules as “any sell order where the seller does not own in full the quantity of the security to be sold at the time of placing the order”.

To determine ownership of security under the new SGX-ST Rules, a seller is deemed to own a security if he:

  • is the legal or beneficial owner of the security unless such ownership is pursuant to a securities borrowing agreement;

  • (i) has purchased or has entered into an unconditional contract to purchase the security, or (ii) has tendered other securities for conversion into the security, or (iii) has a right to purchase the security under an option and such option has been exercised, or (iv) has a right to subscribe for the security and such right has been exercised, but has not received delivery of such security and the delivery would in the ordinary course be before the settlement of the sale of the security; or

  • has lent a security pursuant to a securities lending agreement as a result of which he is no longer the legal or beneficial owner but has a right of recall.


Trading Members should note their obligations to, inter alia, put in place systems and procedures to facilitate the marking of all sell orders by their customers. Further, a Trading Member or its Trading Representative shall not enter a sell order in the Trading System if a customer has not indicated whether the sell order is a “Short Sell Order” or a normal sell order. Trading Members and their Trading Representatives may be liable for fines on violation of the applicable SGX-ST Rules.

All market participants are expected to accurately disclose the nature of their sell orders for Trading Members’ compliance with the new SGX-ST rules. It is pertinent to note that any deliberate wrongful marking of sell orders may be construed as an intention to manipulate the market or false reporting to the SGX, both of which are offences under the Securities and Futures Act, and offenders are liable on conviction to a fine not exceeding S$50,000 or to imprisonment for a term not exceeding two (2) years or both.

Publication of Short Sales Information

The SGX will also be reporting the aggregate statistics for Short Sell Orders before the start of each Trading Day. Information published will include the aggregate volume and value of Short Sell Orders matched and executed in respect of each security for the preceding Trading Day.

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