Notes on short positions

The figures you see result from the Securities and Futures (Short Position Reporting) Rules (Rules), a piece of legislation produced as a knee-jerk response to the Global Financial Crisis. Because there was so little short-selling in HK, the Government set the threshold low enough to detect it, so that the SFC would have something to report.

Reportable net short positions in "specified shares" at the end of each week are filed with the SFC confidentially.
The positions are aggregated and published by the SFC as at the end of each week since 31-Aug-2012.
Figures are published 1 week after the reference date. We combine these with our database of outstanding share numbers in that class of shares (as disclosed to SEHK) resulting in percentage stakes.
Note that H-shares are usually not the only class of equity in PRC issuers, and the controlling shareholder usually does not hold much of the H-share class, so their free floats are larger, and hence the aggregate short positions tend to be larger as a percentage of the class.
Under the Rules, net short positions of HK$30m or 0.02% of the class of shares (whichever is lower) in "specified shares" must be notified to SFC, but only if the short sale was made on SEHK, not on an overseas exchange.
Derivatives are not counted.
SEHK has a list of "designated securities" for which (covered) short selling is legal. Prior to 15-Mar-2017, under Schedule 1 of the Rules, the position was only reportable if the stock was in the Hang Seng Index or the Hang Seng China Enterprises Index, or was classified by Hang Seng Indexes Company Ltd as a "financial" stock. Since 15-Mar-2017, all stocks are covered, which accounts for the jump in the total market short position on 17-Mar-2017, from HK$207bn to 340bn, and from 137 stocks to 937 stocks.
We do not adjust the history for stock splits, consolidations or bonus issues.

Recommend Webb-site to a friend