PwC's Managing upstream risk: Regulatory reform review - An asian perspective August 2013 | Page 26

3.2 Short Selling

3.3 Foreign Currency
Myanmar
On 5 August 2013 the country introduced interbank currency trading, the latest reform since the managed float of the kyat currency from April 2012. The introduction of the interbank currency trading is a big step towards the emergence of a foreign exchange market as foreign banks are not allowed to operate in Myanmar. The Myanmar president also enacted a law in July 2013 that gave the central bank greater independence from the Ministry of Finance. The central bank sets a benchmark rate against the dollar each day.

Hong Kong
The HK SFC enforcement division issued on 1 August 2013 guidelines on selling practices of placing shares. Investors and intermediaries may face criminal prosecution for illegal short selling if they sell placing shares prematurely, or before completion of a placement. The warning came after recent SFC investigations which revealed some misconceptions in the market where placees: • Were mistaken that the trade would not amount to illegal short selling even if they did not have the shares when they placed the sell order provided that they could settle the trade on the settlement day with the placing shares allotted to them; and • Thought that they could sell the placing shares before completion of a placement by relying on oral or written confirmations from their placing agents about the quantity of shares they would be allotted as guarantees for receiving the same number of placing shares on the completion date to settle the trades. In general, a placement before its completion is subject to various conditions which may or may not be fulfilled. In particular, a placement is usually subject to (i) the SEHK granting the listing of, and permission to deal in, the placing shares; and (ii) the SEHK does not revoke such listing and permission.

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Regulatory Reform Review | Capital Markets