Parliamentary Replies
Published Date: 02 March 2023

Written reply to Parliamentary Question on protection for Singapore companies against short sellers

Date: For Parliament Sitting on 2 March 2023

Name and Constituency of Member of Parliament

Mr Yip Hon Weng, Yio Chu Kang SMC


To ask the Prime Minister (a) how are Singapore companies protected against short-selling companies like Hindenburg Report which earn money by betting on stocks falling especially when such reports may not be true; and (b) what safeguards do Singapore investment companies have against such short sellers undermining their assets.

Answer by Mr Tharman Shanmugaratnam, Senior Minister and Minister in charge of MAS:

1. Transparency, in the form of accurate, clear, and timely communication, is the best defence for a listed company that is the subject of a short-seller report. The Singapore Exchange (SGX) has a set of published guidance on what listed companies should do when faced with adverse reports or rumours.SGX Regulator’s Column, Focus on clarity and transparency crucial for companies under siege, 20 Aug 2015, accessible at: . Listed companies must provide, as soon as possible, a full response to such reports to enable stakeholders to make informed decisions. If more time is needed to issue a response, the company can request for a trading halt of its shares on the SGX. 

2. MAS’ regulatory framework aims to protect the interests of investors and the integrity of our markets, rather than the fund management or investment companies. To this end, SGX RegCo and MAS will closely examine both the short-seller report and the company’s response. 

a. SGX RegCo may issue public queries to prompt the relevant company to provide all material information to address the issues raised in the short-seller report. It may also order an independent review if there are areas of concern. Where there is evidence of potential breaches of SGX’s Listing Rules by the company, SGX RegCo will launch an investigation and take the necessary disciplinary action.
b. The short-seller report will also be reviewed and share trading will be closely monitored for signs of irregularities. MAS and the Commercial Affairs Department (CAD) will step in to investigate if there are grounds to suspect that market misconduct has occurred.

3. To protect the investments that are managed by fund managers, MAS expects the managers to have robust processes to manage portfolio investment risks. These processes include setting appropriate limits to manage the risks of their portfolios. They must also actively monitor their investment portfolios to enable them to respond expediently to adverse and sudden changes in market conditions.

* * *