CAPE TOWN - THE FINANCIAL Sector Conduct Authority (FSCA) is preparing a “conduct standard” as part of the consultation process regarding possible new regulations, about the disclosure of taking short positions in the stock market.
FSCA division executive: market integrity Jurgen Boyd said yesterday that the conduct standard would be released – he did not say when – following the receipt of “extensive comments” about the possible new regulations.
The taking of short positions in the market is not disclosed to the regulator on the JSE and there is no formal data available to investors, unlike for instance in the US.
Millions of retail investors in the US, known as the “Robinhood Redditors”, in a united front on social media sharply bid up the shares of some poorly performing US listed companies such as GameStop, forcing massive financial losses on traders that had shorted the price and on hedge funds.
Although the full extent of shorting is not known in South Africa, it has been reported that there were large short positions in Steinhoff and the African Bank prior to their share price collapses.
It is felt that had there been information on these at the time, it might have affected the investment decisions of other investors.
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