Hong Kong could take further steps to enhance the transparency and effectiveness of its short-selling regulatory regime, according to Risk Metrics, which advises more than 2,000 institutional investor clients.
The Securities and Futures Commission (SFC), the territory’s market regulator, bans naked short-selling, which prevents investors from shorting shares they do not already have access to. It also enforces the uptick rule, which restricts short-selling orders to stocks that are rising in value.
Citing these precautions, the SFC has resisted adopting the more comprehensive bans on short selling embraced by other regulators.
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