The Philippine Stock Exchange (PSE) expects to officially open its short-selling platform by 23 October.
PSE president and CEO Ramon S. Monzon said the bourse has been conducting several webinars for trading participants since last month in preparation for its launch.
“We are scheduled to conduct a webinar for retail investors on investment on October 6, just some salient features of our short selling program,” Monzon said at a forum on legislative reforms for the domestic capital markets.
The PSE earlier said companies whose shares can be shorted have been expanded to include those that compose the PSE MidCap index and PSE dividend yield index, expanding the list from a previous composition limited to the benchmark 30-company PSEi and exchange traded funds or ETFs.
The PSE dividend yield index are companies that consistently give high yielding dividends, while the PSE Mid Cap index showcases medium sized companies listed at the bourse. The indices have 20 constituents each.
The PSE, however, said the shorting of stocks can only be limited to no more than 10 percent of outstanding shares. Exceeding the threshold triggers automatic exclusion from the list until the short interest ratio falls back to within prescribed limits.
The PSE said its systems are ready for the short selling platform after it received regulatory approval on so-called sticking points in the securities borrowing and lending system.
Short selling can only function if an SBL program is in place. In particular the PSE said the Securities and Exchange Commission’s approval of offshore collateral for SBL in May while the Bureau of Internal Revenue accepted the filing and registration of the Global Master Securities Lending Agreement this month.
The SEC earlier said it anticipates the potential of short selling to boost trading activity in the local equities market.
“We are pushing to align the short selling environment with the major Asian markets, which has the potential to promote liquidity, stabilize the market, protect investors and further unlock the value of shares of Philippine corporations,” SEC chairman Emilio B. Aquino said.
The SEC has paved the way for short selling in the country by issuing the relevant rules as early as 2018, when it approved the PSE’s guidelines on short selling transactions.
It has since worked together with the PSE and market participants towards ensuring that they are ready for the implementation of the guidelines.
Recently, the SEC has looked at the adoption or non-adoption of existing practices in other markets to advance short selling in the Philippines. In Asia, short selling is allowed in Singapore, Hong Kong, Malaysia, Thailand and Indonesia, among others.
