Securities lending collateral rules

When a client engages in short selling, i.e. selling securities after a short sale from a brokerage firm, a collateral will be calculated to ensure that the client is able to close out the short position.

● In the case of HK stock short selling, there will be frozen funds valued at 105% of the short positions. The frozen funds shall be regarded as the short-selling collateral.

● In the case of US stock short selling, there will be frozen funds equal to the value of the short positions. The frozen funds shall be regarded as the short-selling collateral.

The short-selling collateral is not included in the cash buying power. If a deficiency occurs after the short-selling collateral is deducted from cash, it will be regarded as a financing deficiency to calculate interest.