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Martin Wheatley From Komfie Manalo, Opalesque Asia:

Hong Kongs market regulator, the Securities Futures Commission on Thursday launched a consultation inviting the public to express their comment on the proposed subsidiary legislation that calls for a short position reporting regime.

Under the regime, the SFC requires all short positions that hit the threshold of 0.02% of the issued share capital of a listed company, or a market value of $30m (whichever is lower), to be reported on a weekly basis. The rule says that the party who benefits from the short position is responsible for the reporting.

"The reporting requirement will only apply to the constituent stocks of the Hang Seng Index, the Hang Seng China Enterprises Index and other financial stocks specified by the SFC. The reporting requirement may be tightened to further enhance transparency and monitoring in contingency situations," the SFC said in a statement.

The Hong Kong watchdog will be providing an electronic reporting facility and a report template to ease the process.

SFCs Chief Executive Officer Martin Wheatley commented, "One of the lessons learnt from the recent global financial crisis is the importance for regulators to have access to useful information. Regulators can make use of this information to assess the market dynamics, and if necessary, take appropriate regulatory action to address any potential emergin......................

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