FINMAR 2.3 Calculation of net short position

A net short position is the position remaining after deducting a long position (if any) that a person holds in relation to the issued capital of a company from a short position in relation to the issued capital of that company, where the value of the long and short positions is calculated in accordance with the provisions below.

The calculation of a net short position must take account of any form of economic interest, whether by virtue of a long or short position, in the issued capital of the company.

A net short position must be calculated on the basis of the position held at midnight at the end of each day that a person has the net short position.

A 'long position' is the total of:

1. (1)

   the number of shares a person holds in a company; and

2. (2)

   any exposure, calculated on a delta-adjusted basis, to the issued capital of the company the person has through his holding of financial instruments which will result in the person making a profit, whether directly or indirectly, if there is an increase in the price or value of the shares of the company.

A 'short position' is the total of:

1. (1)

   the number of shares in a company that a person has sold where the person has borrowed or needs to borrow or purchase shares to settle the transaction and the shares have not yet been returned to the lender, or borrowed and returned to the lender, or purchased, as the case may be; and

2. (2)

   any exposure, calculated on a delta-adjusted basis, to the issued capital of the company the person has through his holding of financial instruments which will result in the person making a profit, whether directly or indirectly, if there is a decrease in the price or value of the shares.

For the purposes of calculating a net short position when a company is in a rights issue period:

1. (1)

   a long position in the nil paid rights cannot be deducted from a short position in relation to the company; and

2. (2)

   any short position in the nil paid rights must be taken into account.