PASLA: Philippines short selling framework still needs work
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PASLA: Philippines short selling framework still needs work 06 March 2018Hong Kong Reporter: Becky Butcher
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The Philippines short selling infrastructure is due to launch this year, however, a Pan Asia Securities Lending Association (PASLA) board member has suggested that 2018 might not be a 鈥渞ealistic launch date鈥�.
After a consultation paper was released by the Philippines Stock Exchange (PSE) in November last year on the launch of the Philippines short selling infrastructure, a PASLA executive committee member suggested that there is still work to be done in certain areas, one being contracts.
A panellist at the 15th annual PASLA/RMA conference explained that contracts are 鈥渢ough鈥� from an offshore perspective because they are controlled by Philippines law, not by the US or Europe.
There was also a discussion around if collateral was to be held onshore or offshore. The executive committee member said: 鈥淲e are seeking further clarity from officials in the Philippines.鈥�
He added: 鈥淲e need these to be more clear-cut before the market can evolve.鈥�
After the launch of the consultation paper in November last year, PASLA organised four dedicated board members for the Philippines from January this year to discuss the securities lending market and proposals they have implemented within the short selling framework.
A panellist suggested that the securities borrowing and lending (SBL) model that is going to be used in conjunction with the short selling regime is going to be largely domestic-focused, but over time the PSE has indicated that they will look to encourage participants from offshore participants.
However, there will be restrictions on trading participants and also securities that can be short sold.
The panellist concluded: 鈥淎s PASLA continues engagement with the PSE, we are looking forward to having more discussions throughout the year in making updates to the existing SBL model and the short selling rules.鈥�
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