NO 248 – OCTOBER 2013

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WFE Focus
Regulation

CFTC certifies futures contract on S&P BSE 100 index

The Commodity Futures Trading Commission’s Division of Market Oversight issued a letter advising the BSE that its S&P BSE 100 Index futures contract satisfies the requirements of the Commodity Exchange Act and the CFTC Regulations and may be offered or sold to persons in the US beginning 24 September 2013.

Hong Kong Exchanges publish revised regulation for listing of overseas companies

The Stock Exchange of Hong Kong and the Securities and Futures Commission published a revised joint policy statement regarding the listing of overseas companies. The objective of the revised rules is to promote transparency in the listing process; provide regulatory certainty for overseas companies seeking either primary or secondary listing in Hong Kong; and maintain the quality of Hong Kong’s financial market, recognized for its high standards of regulation, investor protection and corporate governance.

Hong Kong Futures Exchange: CFTC certifies two index futures contracts

The Hong Kong Futures Exchange, a wholly-owned subsidiary of Hong Kong Exchanges and Clearing, announced that investors in the US can now trade its CES China 120 index futures and HSI Volatility index futures contracts directly, after they were certified by the US’s Commodity Futures Trading Commission. The CES 120 futures contract is the world’s first exchange-traded futures contract with an index that tracks A shares of Mainland companies as well as Mainland stocks listed in Hong Kong. It is a convenient, cost effective way to gain exposure to the Mainland and Hong Kong stock markets.

Singapore Exchange codifies rule on share buy-back limit

The Singapore Exchange will codify in its listing rules the existing share buy-back limit of 10% for listed companies on both the Mainboard and Catalist with effect from 1 October 2013. Listed companies will be able to buy back up to 10% of their total number of issued ordinary or preference shares.

SIX Swiss Exchange allows short selling as part of self-regulation

In consultation with FINMA, the Swiss regulator, SIX Swiss Exchange and Scoach Switzerland will supplement their regulations regarding short selling. Short selling will be permitted if the selling party is able to settle the transaction within the deadline set for this, i.e. deliver the securities on time. Specifically, SIX Swiss Exchange’s and Scoach Switzerland’s rule books is being expanded to include information on the powers of the stock exchange to regulate short selling. The new regulations in fact provide the management of the exchanges with the flexibility to react to changing, special market situations if necessary. Following consultation with FINMA, the exchanges may, if required, implement market-based restrictions on short selling at short notice. These new regulations will enter into force on 11 November 2013.

Taiwan’s Financial Supervisory Commission takes measures to stimulate trading activity

The Taiwan Stock Exchange welcomes recent measures taken by the Financial Supervisory Commission to stimulate trading activity. Since 23 September 2013, around 1,200 borrowed stocks currently eligible for margin trading have been exempted from the uptick rule and may be sold at a price lower than the closing price of the previous trading day. The uptick rule requires SBL (Securities Borrowing & Lending) short sales for borrowed shares to be entered at a price no lower than the previous day’s closing price. This measure is expected to increase the ease of trading and expand hedging options available to investors.