The suspension and designation of 3 highly active and leveraged stocks that
saw their values went from rags to riches and back continue to cause much
grief and unhappiness among investors that were caught in the whirlwind.
Clients and remisiers were equally upset by the turn of events as many are
going to be hurt with a lot of losses, and now the latest, investigation on
short selling and probably prohibitive fines that could hurt the pockets
very badly.
The President of The Society of Remisiers, Jimmy Ho Kwok Hoong, has been
caught in the midst as representative of remisiers and trying to alleviate
the pains and losses of his members and their clients. In another letter to
the ST Forum he lamented the lack of clarity of SGX’s instruction and
slowness to investigate the counters that saw their prices shot through the
roof within a short span of time. The mess got worse when different broking
houses started to interpret the instructions differently and changing
continuously.
As a result some clients sold their shares prematurely and ended in short
positions which could lead to penalties from SGX. I quote from Jimmy Ho’s
letter, ‘Compounding matters, clients are now required to show satisfactory
evidence that they own the “designated” security, either with the CDP or
other custodians, before they are allowed to sell. Clients are further
upset over this new ruling, which is onerous, impractical and illogical.
The SGX’s handling of the situation, so far, has been amateurish.’
What is happening?
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