Hong Kong's financial regulator yesterday unveiled a new regime for disclosure on short selling, in an aggressive move to boost market transparency that is likely to influence reforms in other financial centres. The Securities and Futures Commission plans to force equity market participants to submit weekly reports detailing any short positions over certain thresholds. These “trigger levels” are set much lower than those found in New York or London. “A build-up of large short positions may be potentially disruptive to market stability,” said Martin Wheatley, SFC chief executive.

Mr Wheatley's views carry weight as he chairs the taskforce on short selling at the International Organisation of Securities Commissions, which represents more than 100 regulatory bodies.

In addition, Hong Kong is one of the few markets that did not ban short selling or impose other emergency restrictions during the financial crisis. That was because its existing regulatory regime already contained some of the measures imposed overseas, including a ban on “naked” short-selling.