Outgoing Securities and Futures Commission chief executive Martin Wheatley said the long-awaited rule on short-selling disclosure will be implemented soon after related legislation is amended in the second half of this year. The SFC last year completed a consultation exercise on a proposal to tighten short-selling reporting requirements to bring Hong Kong into line with its international peers. The rule would require fund houses and institutional investors to report their short-selling positions in Hong Kong-listed securities if they were equal to a certain percentage of the issued share capital of the target companies. The change follows international efforts to increase transparency in this sector after claims that some institutions abused short selling during the financial crisis. Short sellers borrow shares and sell them on the expectation that the price will go down later. They then buy the same number of shares at the lower price and return the shares they borrowed, pocketing the difference in the prices. Besides the short-selling rule change, Wheatley said the SFC would also work on facilitating more yuan-denominated products as Hong Kong moved to become an offshore yuan-trading centre. China is gradually loosening restrictions on its currency to increase its use in international transactions, and has allowed cross border yuan trade settlements since 2009. Last July, the People's of Bank of China relaxed its regulatory regime to allow yuan investment products such as yuan funds, yuan shares and yuan bonds to be launched in Hong Kong. The SFC has to approve any yuan funds or yuan real estate investment trusts. The stock exchange, which plans to create a facility to make it easier for investors to get yuan to trade yuan-denominated stocks in the second half of this year, will also need SFC approval. Wheatley finishes his six-year stint on June 8.