The Philippine Stock Exchange is set to introduce its shortselling initiative, having recently concluded the formulation of guidelines governing such transactions.
The PSE has confirmed that regulatory authorities have granted approval for key aspects of securities borrowing and lending (SBL), without which the short selling mechanism cannot operate effectively.
PSE president Ramon Monzon said this development represents a significant stride toward the complete adoption and execution of these eagerly anticipated programs.
The SEC had previously granted approval for offshore collateral use in SBL in May 2023, and the BIR has accepted the filing related to these initiatives.
The SEC classifies short selling as a trading strategy focused on profiting from a stock’s anticipated price decrease.
This tactic entails an investor selling a security they do not possess, made possible by borrowing the security, with a commitment to return the borrowed security or its equivalent on a predefined future date.
The PSE will unveil the official launch date of the short selling program in due course.