PSE to open short selling before year-end

THE Philippine Stock Exchange (PSE) is planning to launch the short selling of securities before said on Friday.

“We are looking [to open short selling] within 2018. We’re already at the tail end,” PSE Chief Operat

Short selling is the exchange’s new initiative that will allow investors to hedge risks by borrowing shares from a lender, selling it and betting on a price drop to

to ensure that clients have entered into the necessary borrowing arrangements—which must adhere to existing PSE, Securities and Exchange Commission (SEC), and Bureau of Internal a short-selling order.

Through a master securities loan agreement ( MSLA), the borrower and the lender should agree on collaterals. These may be cash, government securities and other PSE index shares.

“There could be a transaction without [an] MSLA, but terms “It protects you as a lender, as a borrower, as a lending agent. It protects all parties.”

Meanwhile, the trading participant or lending agent will fees and commissions.

The SEC approved in July the PSE’s proposed guidelines, which includes provisions on eligible securities and transaction procedures.

Under the rules, only the 30-member PSEi and exchange traded funds shall be allowed for short selling.

A minimum of 10 percent of the company’s total oustanding shares should also be shorted.

be extended to second- and thirdtier shares soon.