SC, Bursa Malaysia to lift temporary suspension of regulated short selling
KUALA LUMPUR (Dec 16): The Securities Commission (SC) and Bursa Malaysia Bhd will lift the temporary suspension of regulated short selling (RSS) and have reviewed other market management measures introduced this year following heightened market volatility arising from the broader impact of Covid-19.
"This decision was made after careful consideration of current market conditions and the evolving needs of the market," they said in a joint statement today.
The suspension of RSS, scheduled to expire on Dec 31, 2020, will be lifted on Jan 1, 2021, to facilitate investors’ risk management and revive securities borrowing and lending activities, which is an integral capital market function to promote product development and market making activities, they said.
The statement said the RSS will be re-introduced with the enhanced control measures to ensure stability and maintain investor confidence, including the temporary reduction of the daily gross short position limit for approved securities from 3% to 2%, and the introduction of a new cap of 4% on RSS aggregated net short position.
Meanwhile, it said the temporary suspension on intraday short selling (IDSS) and intraday short selling by proprietary day traders (PDT short sale) due to expire on Dec 31, 2020, will be extended till Feb 28, 2021.
"Consequential to the extension of PDT short sale, temporary waivers in relation to PDT will be extended to Feb 28, 2021," it said.
The temporary revisions to existing market management measures, namely the dynamic and static price limits as well as the circuit breaker, will be extended to May 30, 2021. These were implemented on July 20, 2020. and are due to expire on Jan 18, 2021.
In addition, the temporary relief measures and flexibilities relating to margin financing, which are due to expire on Dec 31, 2020, will be extended to June 30, 2021.
"The SC and Bursa Malaysia will continue to closely monitor ongoing domestic and global developments, and take a pro-active approach in implementing appropriate measures that support a fair and orderly market," said the statement said.