Singapore Short-Selling Rules
This article covers the Singapore Short-Selling Rules and how these work within FundApps.
- FundApps Framework
- Identifying the appropriate configuration
- Sell-side clients
Since 1 October 2018, the Monetary Authority of Singapore (“MAS”) has required reporting of net short positions on a weekly basis. The general obligation for reporting sits with the person or entity legally responsible for delivery of the short sell orders, and they must report any net short position exceeding 0.2% or 2 million SGD (the “thresholds”).
In a variety of situations, other individuals and entities may take on the responsibility for reporting. Depending on the arrangement, reporting may be required of any net short position, regardless of whether the thresholds have been exceeded. This is based on the guidance provided by MAS - references below are to this guidance.
FundApps has two rule types in place (three rules in total) in order to reflect whatever arrangements customers have:
- Two threshold rules, which check a portfolio’s net short position against the thresholds (Short Selling: Singapore - Value and Short Selling: Singapore - Percentage)
- A non-threshold rule, which has no thresholds and will trigger a disclosure on a portfolio with any net short position. (Short Selling: Singapore - No Threshold)
All three rules should be approved as the system will run the appropriate one based on the value specified in the ShortSGReportingType portfolio property
You should set the appropriate rules to run using the portfolio property, ‘ShortSGReportingType’, which may be set to Threshold, NoThreshold, or Exclude. If no property is selected, the property will conservatively default to NoThreshold.
Identifying the appropriate configuration
For each portfolio, please use the following guide of what the portfolio represents to determine which value to set for ShortSGReportingType (Note: this does not apply to sell-side clients - see below). As usual, an Admin user can set these values in the Portfolio screen in the UI or by uploading up updated Portfolio file (CSV format).
Discretionary managed portfolio (i.e. separately managed account)
Your firm's relationship to the assets of this portfolio is that you only act as a discretionary asset manager (for some underlying client/investor).
Please determine if the underlying investor/client will be reporting their short positions in Singapore on behalf of all of the assets they hold (for example if they've hired other external managers or manage money themselves) and have chosen to report. The reporting obligation is on them as the legal holder, but they might choose to have their investment managers report for them, in which case they need to let you know (Section 6, MAS Guidance).
In this situation, ShortSGReportingType should be configured on each portfolio as follows:
- If the underlying investor wants you to disclose as a discretionary manager, then populate NoThreshold for this property.
- If the underlying investor will disclose their short positions in this portfolio, populate Exclude for this property.
- If you are the ONLY investment manager for the underlying investor, and they have indicated that you should disclose for all of their assets, then populate Threshold.
Fund structured as a company (e.g. SICAV, US RIC, OEICs, and other funds structured as a company)
Even if your firm is managing the assets for this fund, the obligation is in regard to the legal holder: the fund itself. (Section 4.20, MAS Guidance)
In this case, ShortSGReportingType should be populated as follows (Note: If you have an Umbrella, you should set this portfolio property on the Umbrella itself rather than the portfolios below it):
- If a fund structured as a company reports on its own behalf, it should populate Threshold.
- If the fund delegates their reporting obligation to you as a manager, populate Threshold.
Portfolio/fund structured as a unit trust
Please determine if the Trustee will be reporting the short position of all of the trusts for which it is the trustee. The reporting obligation is on them as legal holder, but they might choose to have the trust itself (or the investment managers who manage the assets of the trust) to report for them, in which case they need to inform you (Section 7, MAS Guidance).
In this case, ShortSGReportingType should be populated as follows:
- If the trustee wants you (as manager) to disclose the trust itself, then populate NoThreshold for this property.
- If the trustee has confirmed they will disclose their short positions in this portfolio (outside of FundApps), populate Exclude for this property.
Portfolio/fund structured as a limited partnership
It is assumed that the general partner (or its nominee) is legal owner of the partnership's property and therefore has the disclosure obligation.
- Populate Threshold
Note: if your corporate tree includes an entity that is a general partner of more than one fund as a limited partnership, please contact the support team via HelpCentre or firstname.lastname@example.org in order to discuss the optimal configuration in your setup.
For sell-side clients (where you deliver assets to FundApps as portfolios but they represent no legal personality, and your FundApps Entities hold title): populate Threshold at the Entity level. (Section 5, MAS Guidance)