SINGAPORE, Sept 23 Singapore Exchange (SGXL.SI) said late on Monday that it would tighten rules to discourage "naked" short-selling as part of a global move to stem the selling of shares by speculators who do not own the securities.
Traders who cannot deliver shares they sold will now face a penalty of 5 percent of the value of the failed trade subject to a minimum of S$1,000 ($710). This is in addition to the current processing fee for buying-in of S$30 per contract.
"Cumulative short-selling of individual share securities without the discipline of borrowing to cover delivery obligations, may threaten the orderliness of our market," SGX said in a statement.
Short-sellers are investors who sell shares they do not own in the hope of buying them back at a lower price to make a profit. Those who did not borrow the securities in advance of the sale are "naked" short sellers.
SGX will publish a list of buying in securities and the volume of shares sought, at 11 am Singapore time every day to provide stock investors with more information, the bourse operator said. (Reporting by Kevin Lim; Editing by Louise Heavens)