Customer Notices Indonesia – short selling notice
On 7 Oct 2008, the Indonesia Stock Exchange ("IDX") issued a letter to emphasize that:
- Short selling is strictly prohibited
- A sell trade resulting in a short position that is covered by a buy trade on the same day (i.e. a day trade) is considered short selling and thus is also prohibited.
In addition to the above, the KPEI (Central Clearing) has suspended its stock lending facilities, thereby eliminating the use of stock borrowing as a potential method of saving a failed trade. As a consequence:
- For sell trades, any failed delivery of shares will be settled by paying the alternative cash settlement on the settlement date before 12 noon, resulting in a penalty charge of 25% of the notional trade value.
- For buy trades, the client will get a refund of 100% of cash paid plus this 25% compensation instead of shares.
To help avoid any potential failed settlement, Credit Suisse may be required to confirm the availability of stock before executing your sell orders. We apologize for any difficulties this may cause and please ask for your cooperation in this regard in order to help avoid regulatory breaches by Credit Suisse and its customers.