Statute Details
- Title: Securities and Futures (Short Selling) Regulations 2018
- Act Code: SFA2001-S328-2018
- Type: Subsidiary legislation (SL)
- Authorising Act: Securities and Futures Act (Chapter 289) (“SFA”)
- Enacting formula: Made by the Monetary Authority of Singapore (MAS) under sections 137ZM and 341 of the SFA
- Commencement: 1 October 2018
- Current version status: Current version as at 27 March 2026 (per the legislation portal)
- Parts: Part 1 (Preliminary); Part 2 (Registration as account holder); Part 3 (Short Selling); Part 4 (Exemptions); Schedule (Short position threshold)
- Key definitions (Regulation 2): “account holder”, “closing price”, “electronic online system”, “fund manager”, “position day”, “segmented short position day”, “segmented short sell order”, “trading desk”, “short position threshold”
What Is This Legislation About?
The Securities and Futures (Short Selling) Regulations 2018 (“Short Selling Regulations”) form part of Singapore’s regulatory framework for short selling in the capital markets. In plain language, the Regulations operationalise the Securities and Futures Act provisions that require certain controls over short positions in “specified capital markets products”. The overall policy objective is to promote orderly markets and reduce the risk that short selling could be used in ways that undermine price discovery or market integrity.
Short selling is generally the practice of selling securities (or contracts linked to securities) that the seller does not currently own, with the expectation of buying them later at a lower price. Because short selling can amplify market movements and can be used to create or conceal exposures, regulators impose reporting, threshold, and exemption rules. The Short Selling Regulations are designed to make those controls workable in practice—particularly by defining key terms, setting out how thresholds are determined, and prescribing when and how short positions must be reported to MAS.
While the extract provided shows the structure and some core definitions, the Regulations also include detailed mechanics for determining quantities, volumes and values, identifying “specified capital markets products”, and addressing “segmented” short positions—an important concept for large financial institutions that operate multiple trading desks or for customers whose positions are managed by fund managers.
What Are the Key Provisions?
1. Preliminary framework: citation, commencement, and definitions (Regulations 1–2). The Regulations commence on 1 October 2018. Regulation 2 is central because it defines the operational vocabulary used throughout the regime. For practitioners, the definitions are not merely interpretive—they determine whether a person is an “account holder”, whether an instrument is a “specified capital markets product”, and how reporting triggers are calculated.
Key defined terms include:
- “account holder”: a person registered as an account holder by MAS under Regulation 3(2).
- “closing price”: the final price on an approved exchange on a trading day, determined according to exchange rules/practices.
- “fund manager” and “customer”: relevant to exemptions and to how positions are attributed where discretionary mandates exist.
- “position day”: the last day of each week on which the approved exchange is open for trading of the specified products.
- “electronic online system”: the MAS system for submitting information required under reporting and exemption-related provisions.
- “trading desk”: a separate and distinct unit of a corporation where buy/sell decisions are made in the ordinary course.
Most importantly, Regulation 2 introduces the concept of “segmented short sell order” and “segmented short position”. These concepts are designed to allow certain entities to treat short positions separately by reference to trading desks (for corporations), discretionary fund management arrangements (for customers of fund managers), or trust structures (for trustees). In other words, the Regulations anticipate that a single legal entity may have multiple internal or external “decision-making” loci, and the regime can attribute obligations accordingly.
2. Registration as account holder (Regulation 3). Part 2 requires persons who fall within the short selling reporting/controls regime to be registered as an “account holder” by MAS. This is a gatekeeping step: without registration, the person may not be able to comply with reporting obligations or may be treated as non-compliant if required to report. For legal and compliance teams, this means that the first practical question is whether the entity is within the class of persons expected to hold an account for the regime.
3. Determination of quantity, volume and value; specified products; and threshold mechanics (Regulations 4–7 and Schedule). Part 3 is the operational core. It addresses:
- How to determine the quantity, volume and value of specified capital markets products (Regulation 4). This is crucial because thresholds are usually expressed in terms of value or size of position, and the method of calculation can materially affect whether a reporting trigger is reached.
- Which products are “specified capital markets products” (Regulation 5). The regime does not apply to all securities; it applies to those identified as specified, typically traded on approved exchanges.
- Prescribed agreements/arrangements under section 137ZH(3)(c) of the SFA (Regulation 6). This indicates that certain contractual or structural arrangements may be relevant to whether a short position is treated in a particular way.
- Short position threshold (Regulation 7 and the Schedule). The Schedule sets out the threshold, and Regulation 7 links the definition to the Schedule.
Although the extract truncates the later parts of Regulation 2 and does not reproduce the full text of Regulations 4–8, the structure indicates that the regime uses a threshold-based reporting model. Practically, this means that once a person’s short position (or segmented short position) reaches or exceeds the threshold, the person must report. The Schedule and the calculation rules in Regulation 4 are therefore likely to be the most heavily used provisions in compliance workflows.
4. Reporting of short position (Regulation 8). Regulation 8 requires reporting of short positions to MAS. The presence of the defined “electronic online system” suggests that reporting is electronic and tied to specific reporting dates or “position days”. For practitioners, the key compliance tasks typically include:
- monitoring short positions continuously or at least at reporting cut-offs;
- calculating the relevant quantity/volume/value using the Regulation 4 methodology;
- determining whether the position is segmented (and therefore attributed to a trading desk, fund manager arrangement, or trust); and
- submitting the required information through MAS’s system by the prescribed timing.
5. Exemptions (Part 4: Regulations 9–13). Part 4 provides targeted exemptions. The Regulations recognise that some market participants or structures may have legitimate reasons for short selling activity that should not trigger the same reporting or compliance burdens, provided conditions are met.
The extract identifies the following exemption categories:
- Exemption for market-makers (Regulation 9): market-making activity is typically regulated and can be essential for liquidity; the exemption likely reflects that such activity is not intended to be speculative in the same way as other short selling.
- Exemption from section 137ZJ of the SFA for a corporation with at least 2 trading desks (Regulation 10).
- Exemption from section 137ZK of the SFA for a corporation with at least 2 trading desks (Regulation 11).
- Exemption for customer of fund manager (Regulation 12): this aligns with the definition of “customer” and the discretionary mandate concept.
- Exemption for trustee (Regulation 13): this aligns with the “segmented short sell order” definition for trustees and the attribution of positions to trust obligations.
For legal practitioners, exemptions are rarely “automatic”. Even where the Regulations provide an exemption, the entity must usually satisfy the conditions (for example, having the requisite number of trading desks, or being a customer under a discretionary authority, or acting as trustee without having an interest in the relevant quantity/volume/value at the time of the order). The definitions of “segmented short sell order” and “segmented short position” strongly suggest that the exemption regime is designed to prevent abuse by ensuring that segmentation is real and operational, not merely nominal.
How Is This Legislation Structured?
The Short Selling Regulations are structured in a practical compliance sequence:
- Part 1 (Preliminary) contains the citation and commencement (Regulation 1) and the definitions (Regulation 2). This part sets the interpretive foundation for the entire regime.
- Part 2 (Registration as account holder) requires relevant persons to register with MAS (Regulation 3). This is the administrative entry point.
- Part 3 (Short Selling) sets out the substantive mechanics: determining position metrics (Regulation 4), identifying specified products (Regulation 5), prescribing relevant agreements/arrangements (Regulation 6), establishing the short position threshold (Regulation 7 and the Schedule), and requiring reporting (Regulation 8).
- Part 4 (Exemptions) provides specific exemptions for market-makers, corporations with multiple trading desks, customers of fund managers, and trustees (Regulations 9–13).
- The Schedule sets out the short position threshold, which is the quantitative trigger for reporting and related obligations.
Who Does This Legislation Apply To?
The Regulations apply to persons who engage in short selling of specified capital markets products on approved exchanges, and who therefore may be subject to the SFA short selling controls. The regime is also relevant to entities that must be registered as account holders with MAS.
In addition, the exemption provisions indicate that the Regulations are particularly relevant to:
- corporations with multiple trading desks (and their internal allocation of obligations);
- fund managers and their customers under discretionary authority arrangements;
- trustees acting for trusts where positions may be attributed to trust obligations; and
- market-makers who may qualify for exemption due to their liquidity-providing role.
Why Is This Legislation Important?
The Short Selling Regulations are important because they translate the SFA’s short selling policy into day-to-day compliance requirements. For practitioners, the most significant practical impact is the threshold and reporting regime: entities must know how to calculate their short positions (quantity, volume, and value), how to identify the relevant “position day” cut-offs, and when to file reports through MAS’s electronic online system.
Second, the Regulations’ emphasis on segmentation (trading desks, fund manager mandates, and trust structures) is a compliance design feature. It allows sophisticated market participants to manage internal and external decision-making units while still ensuring that short selling obligations are accurately attributed. However, segmentation also increases the need for robust internal controls, documentation, and audit trails—because the exemption and segmentation concepts depend on whether the relevant desk/manager/trustee truly does not manage or have an interest in the relevant quantity/volume/value at the time of the order.
Finally, exemptions can materially reduce compliance burdens, but they also create legal risk if conditions are not met. A practitioner advising a trading firm, asset manager, or trustee should therefore treat the exemption provisions as conditional legal pathways requiring careful factual assessment and evidence of compliance with the definitions and thresholds.
Related Legislation
- Securities and Futures Act (Chapter 289) — in particular the short selling provisions referenced in the Regulations (including sections 137ZH, 137ZJ, 137ZK, 137ZM, and related powers).
- Futures Act — referenced in the metadata as related legislation (relevant where futures-related instruments or regulatory crossovers arise).
Source Documents
This article provides an overview of the Securities and Futures (Short Selling) Regulations 2018 for legal research and educational purposes. It does not constitute legal advice. Readers should consult the official text for authoritative provisions.