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 (Cap. 289)
- Enacting formula (power source): Sections 137ZM and 341 of the Securities and Futures Act
- Commencement: 1 October 2018
- Current status (as provided): Current version as at 27 Mar 2026
- Parts: Part 1 (Preliminary); Part 2 (Registration as account holder); Part 3 (Short selling); Part 4 (Exemptions); The Schedule
- Key provisions (from extract): Regulation 2 (Definitions); Regulation 7 (Short position threshold); Regulation 8 (Reporting of short position); Regulations 9–13 (Exemptions)
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 of “specified capital markets products” traded on approved exchanges. In plain language, the Regulations are designed to control and monitor short selling activity by requiring market participants to register, calculate and report short positions, and comply with thresholds and exemptions.
Short selling can increase market efficiency, but it also creates risks—particularly where large short positions may affect price discovery, liquidity, and market integrity. The Regulations therefore operationalise provisions in the Securities and Futures Act (“SFA”) that regulate short selling conduct, including obligations to report short positions and conditions under which certain entities may be exempt from specific statutory requirements.
Practically, the Regulations matter most to (i) entities that trade or manage portfolios containing specified products, (ii) corporations with multiple trading desks, (iii) fund managers and their customers, and (iv) trustees who may hold or manage positions for trusts. The Regulations also introduce concepts such as “segmented short positions” and an “electronic online system” for reporting, which are central to how compliance is implemented.
What Are the Key Provisions?
1. Preliminary framework: definitions and compliance concepts (Regulation 2)
The Regulations begin with a detailed definitions section. This is not merely drafting housekeeping; it determines how obligations apply in real-world trading and reporting. Key terms include:
- “account holder”: a person registered by the Authority under Regulation 3(2).
- “closing price”: the final price on an approved exchange on a trading day, determined according to exchange rules/practices.
- “position day”: the last day of each week on which the approved exchange is open for trading.
- “electronic online system”: the Authority’s system used to submit information required under Regulations 8(1), 11(1), 12(3) and 13(2).
- “trading desk”: a separate and distinct unit of a corporation where buy/sell decisions are made in the ordinary course.
Most importantly for compliance strategy are the definitions of “segmented short position day” and “segmented short sell order”. These concepts allow certain entities to treat short selling activity as “segmented” where different desks (or different management arrangements) are responsible for different parts of the overall trading obligation.
2. Registration as an account holder (Regulation 3)
Part 2 requires persons who will be subject to short position reporting obligations to be registered as account holders by the Authority. While the extract does not reproduce the full text of Regulation 3, the structure indicates that registration is a gateway requirement. For practitioners, this means that compliance is not only about calculating and reporting positions; it also involves ensuring the correct regulatory status and onboarding with the Authority.
3. Determining quantity, volume and value; identifying specified products (Regulations 4 and 5)
Part 3 includes rules for how to determine the quantity, volume and value of specified capital markets products for short position purposes. The Regulations also identify which products are “specified capital markets products” (Regulation 5). These provisions are critical because thresholds and reporting are typically triggered by quantitative measures. If a firm misclassifies a product or miscalculates value/volume, it may fail to report or may report incorrectly.
4. Prescribed agreements/arrangements (Regulation 6)
Regulation 6 addresses a “prescribed agreement and arrangement” under section 137ZH(3)(c) of the SFA. This suggests that certain contractual or operational arrangements are relevant to how short positions are treated—particularly where obligations to deliver or manage positions arise from agreements. For legal teams, this is a reminder that compliance can be contract-sensitive: the form and substance of arrangements may determine whether a position is treated as within or outside certain regulatory treatment.
5. Short position threshold (Regulation 7 and the Schedule)
Regulation 7 sets the short position threshold, with the Schedule also referenced as containing threshold details. The threshold is the trigger point for reporting obligations (and potentially other regulatory consequences under the SFA framework). The Regulations therefore translate the SFA’s policy into a measurable compliance rule.
6. Reporting of short position (Regulation 8)
Regulation 8 imposes an obligation to report short positions. The extract indicates that reporting is done through the Authority’s electronic online system. Key practical implications include:
- Timing: reporting is tied to “position day” concepts (weekly) and, for segmented arrangements, to “segmented short position day”.
- Measurement: the reported short position must be calculated using the quantity/volume/value methodology in Regulation 4.
- Data integrity: because reporting is system-based, firms need robust internal controls to ensure that the data submitted matches trading records and delivery obligations.
For practitioners, the most common failure mode is not the absence of trading, but the absence of correct mapping between trading activity, delivery obligations, and the regulatory definition of “short position” as calculated under the Regulations.
7. Exemptions: market-makers, multi-desk corporations, fund manager customers, and trustees (Regulations 9–13)
Part 4 provides exemptions that can materially reduce compliance burdens for certain categories of participants, but only if strict conditions are met.
Market-maker exemption (Regulation 9)
Market-makers may be exempt. This reflects the policy that market-making activity is often stabilising and liquidity-providing, and may not present the same concerns as speculative short selling. However, exemptions typically require that the entity qualifies as a market-maker and complies with any conditions attached to the exemption.
Corporations with at least 2 trading desks (Regulations 10 and 11)
Regulations 10 and 11 provide exemptions from specified SFA provisions (identified as section 137ZJ and section 137ZK) for corporations with at least 2 trading desks. The Regulations’ definitions of “segmented short sell order” and “segmented short position” strongly suggest that these exemptions are designed to allow internal segmentation where one desk’s trading does not manage the delivery obligation of another desk.
Customer of fund manager (Regulation 12)
Regulation 12 provides an exemption for a customer of a fund manager. The definitions in Regulation 2 define “customer” in relation to discretionary fund management. The exemption likely turns on whether the fund manager is under an obligation to deliver specified products for the customer and whether the customer’s orders are “segmented” from the fund manager’s managed obligations.
Trustee exemption (Regulation 13)
Regulation 13 provides an exemption for a trustee. The Regulations define segmented orders for trustees where the trustee does not, at the time of the order, have an interest in the relevant quantity/volume/value. This is important for trust structures where multiple beneficiaries or trust accounts may create complex position ownership and delivery obligations.
Segmentation as a compliance technique
Across Regulations 10–13, the Regulations use segmentation concepts to determine whether certain orders/positions should be treated as separate for threshold and reporting purposes. In practice, segmentation can be beneficial, but it is also high-risk: it requires careful documentation of desk responsibilities, discretionary management mandates, and trust interests.
How Is This Legislation Structured?
The Regulations are organised into four Parts and a Schedule:
- Part 1 (Preliminary): sets out citation/commencement (Regulation 1) and definitions (Regulation 2).
- Part 2 (Registration as account holder): provides the registration requirement (Regulation 3).
- Part 3 (Short selling): covers how to calculate short position measures (Regulation 4), identifies specified products (Regulation 5), prescribes relevant agreements/arrangements (Regulation 6), sets the short position threshold (Regulation 7), and requires reporting (Regulation 8).
- Part 4 (Exemptions): provides exemptions for market-makers (Regulation 9), multi-desk corporations (Regulations 10–11), fund manager customers (Regulation 12), and trustees (Regulation 13).
- The Schedule: contains the short position threshold details referenced by Regulation 7.
Who Does This Legislation Apply To?
The Regulations apply to persons who are involved in short selling of specified capital markets products on approved exchanges, and to those who must report short positions as “account holders”. This includes corporations trading through defined “trading desks”, fund managers and their discretionary customers, and trustees managing positions for trusts.
In addition, the exemptions in Part 4 indicate that the Regulations are not one-size-fits-all. Eligibility depends on the participant’s role (e.g., market-maker), organisational structure (e.g., at least two trading desks), and the nature of the management relationship (e.g., discretionary authority for fund management) or trust interest (trustee capacity and interest at the time of order).
Why Is This Legislation Important?
For practitioners, the Short Selling Regulations are important because they operationalise Singapore’s short selling oversight by converting statutory concepts into concrete compliance steps: registration, calculation, threshold assessment, and reporting. The Regulations also provide a structured pathway for exemptions, but those exemptions are tightly linked to definitional and segmentation concepts.
From an enforcement and risk perspective, the most significant practical impact is on internal controls. Firms must be able to (i) identify whether a product is “specified”, (ii) compute short position measures correctly, (iii) determine the relevant “position day” or “segmented short position day”, and (iv) submit accurate reports through the Authority’s electronic system. Where segmentation is relied upon, firms must also evidence that desk responsibilities and delivery obligations align with the regulatory definitions.
Finally, the Regulations influence how legal teams draft and review trading, custody, and management arrangements. Because Regulation 6 references prescribed agreements/arrangements under the SFA, and because exemptions depend on how obligations to deliver are managed, legal documentation can affect whether a firm can claim exemption or whether it must report.
Related Legislation
- Securities and Futures Act (Cap. 289) — in particular the short selling provisions referenced in the Regulations (including sections 137ZM, 137ZH, 137ZJ, 137ZK and 341 as the enabling powers).
- Futures Act (as referenced in the provided metadata context)
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.