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Intraday Short Selling and Intraday Short Selling by Proprietary Day Traders to be Reinstated from 1 January 2022

21 December 2021

The Securities Commission Malaysia and Bursa Malaysia Berhad issued a joint media release on 17 December 2021 announcing that the temporary suspension of Intraday Short Selling (‘IDSS’) and Intraday Short Selling by Proprietary Day Traders (‘PDTSS’) that were scheduled to expire on 31 December 2021 will be uplifted on 1 January 2022.
 
Effective 1 January 2022, IDSS and PDTSS will resume subject to the following enhanced control measures to ensure stability and orderly trading: 

  • IDSS and PDTSS orders may only be entered in accordance with the ‘at-tick’ rule; and 

  • PDTSS will only be permitted for securities listed as Approved Securities in the Main Market (Day Trading Eligible Securities) (‘DTES’) and where the Proprietary Day Trader already has in place an agreement to borrow the DTES to settle all potential failed trades in the event that the executed PDTSS of the DTES is not closed off on T-day itself. 
In addition: 

  • the modifications to paragraph 5.1(1) of the Directive on Regulated Short Selling (No. 8-002) in respect of the threshold for Total Gross Short Position implemented vide Participating Organisations’ Circular No. R/R 15 of 2020 dated 16 December 2020 will no longer apply and the threshold for Total Gross Short Position of an Approved Securities on a particular Market Day will revert to 3% of the outstanding securities of the Approved Securities on that Market Day; and 

  • the Temporary Waivers in relation to Proprietary Day Trading implemented vide the Participating Organisations’ Circular No. R/R 9 of 2020 dated 15 June 2020 extended vide Participating Organisations’ Circular No. R/R 15 of 2020 dated 16 December 2020 and Participating Organisations’ Circular No. R/R 1 of 2021 dated 23 February 2021 will be repealed. 
The announcement of the upliftment of the suspension of IDSS and PDTSS had been previously announced vide Participating Organisations’ Circular No. R/R 5 of 2021 dated 26 August 2021 which can be accessed here.
 
Alert by Phua Pao Yii (Partner) and Kok Chee Kheong (Partner) of the Corporate Practice of Skrine.
 

This alert contains general information only. It does not constitute legal advice nor an expression of legal opinion and should not be relied upon as such. For further information, kindly contact skrine@skrine.com.

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