Major Requirements
Regulated short selling orders on HKEX’s securities market (“the Exchange”) must:
- Be covered short sale (Exchange Participants who conduct short selling transaction must have the presently exercisable and unconditional right to vest the security in the purchaser);
- Be placed only on Designated Securities eligible for short selling;
- Be automatically struck through the Exchange’s system, during the Pre-opening Session (POS), the Continuous Trading Session (CTS) and the Closing Auction Session (CAS);
- Observe “tick rule”, i.e., a short sale order of a Designated Security shall not be made on the Exchange below the POS reference price during POS, the best current ask price during CTS, or the CAS reference price during CAS;
- Comply at all times with the Securities and Futures Ordinance, and the regulations regarding short selling in Schedule 11 of the Rules of the Exchange;
With the exception of Securities Market Maker Short Selling by a Securities Market Maker, Dual Counter Market Maker Short Selling by a Dual Counter Market Maker, Structured Product Liquidity Provider Short Selling by a Structured Product Liquidity Provider, Designated Index Arbitrage Short Selling by a Designated Index Arbitrage Short Selling Participant, Stock Futures Hedging Short Selling by a Designated Stock Futures Hedging Short Selling Participant, Structured Product Hedging Short Selling by a Structured Product Hedging Participant and Options Hedging Short Selling by a Market Maker or an Options Hedging Participant (please refer to Schedules 14, 15, 18 and 19 of the Rules of the Exchange for details).
Designated Securities Eligible for Short Selling
The list of Designated Securities for short selling is revised on quarterly basis. (A full list of Designated Securities is posted under "Designated Securities Eligible for Short Selling"). Please refer to Schedule 11 of the Rules of the Exchange for the selection criteria for Designated Securities.
Definitions