Singapore Exchange (SGX) says it is proposing new rules and measures to provide more information on short sales activities in the marketplace to facilitate greater market transparency.

SGX is also seeking public comments on the proposed rules that require the marking of all sell orders, either as a normal sell order or a short sell order. With the collated data, SGX proposes to report the short sales volume and value by counter for each trading day.

The consultation exercise was introduced after close discussions with the Monetary Authority of Singapore following SGX’s public consultation in November 2008 on transparency measures in relation to short-selling.

The requirement to mark sell orders apply to all securities listed on SGX, with the exception of extended settlement contracts.

This marking of sell orders also extends to direct business trades and the selling trading member must indicate a short sell order or a normal sell order in the married trade reporting system.

To facilitate the marking of sell orders, SGX will require its trading members to put in place safeguards and procedures to ensure that customers indicate their sell orders, whether the trade is conducted via the internet, phone orders and/or the members’ order management systems.

Each of the respective trading interfaces must require the customer to determine whether a sell order is a short sell order or a normal sell order at the point of order entry.

The trading member or its trading representative cannot transmit a sell order to SGX if the customer has not made his/her order indication. the trading member is however not required to verify the accuracy of the customers’ orders.