Apply for Hong Kong stock short-selling permission

1.Why is a separate application required for Hong Kong stock short-selling permission?

In Hong Kong, the Securities and Futures Ordinance mandates that investors cannot sell a stock they do not own unless they either possess it or have a reasonable belief that they can successfully borrow it for selling. Investors must borrow the stock before short-selling it. To enable this process, both the borrower and lender need to sign the Stock Borrowing and Lending Agreement.

Investors must register this agreement with the Hong Kong Inland Revenue Department (IRD) and pay a short-selling application fee of HK$300.To simplify the process, Airstar Bank will act as your agent to register the Stock Borrowing and Lending Agreement on your behalf via GovHK. You can check the registration status at any time in the app.

As a result, investors are required to apply for short-selling permission separately to complete these steps.

2.How can I apply for Hong Kong stock short-selling permission?

To apply through the Airstar app:

1. Go to the Overview tab > "All" > "Stocks" > "Short Selling"

2. Select Real-Time Activation or Activation After Approval, depending on your preference

Note: Prior to applying, please ensure that you have  Margin Investment Account.

2.1 Real-Time Activation

Complete the three following steps:

1. Sign Agreement

You must read and sign the Stock Borrowing and Lending Agreement and the Stamp Duty Supplemental Terms with Airstar, which will only take effect once all procedures are completed, and then apply to activate short-selling permission in real-time.

2. Pay short-selling application fee

For your convenience, Airstar will register the Stock Borrowing and Lending Agreement and pay the short-selling application fee on your behalf. You will need to authorize Airstar to deduct the short-selling application fee from your account, based on the Max BP (Buying Power) in your account.

Note: When deducting the short-selling application fee, Airstar will check the Max BP amount in your account, not the Withdrawable Cash amount. By agreeing to pay the short-selling application fee you confirm that you will use margin if your account lacks sufficient cash, and you will cover any resulting charges and interest.

Once the short-selling application fee is paid, your short-selling permission will be activated, and you can then start selling short Hong Kong stocks. When you sell short, Airstar will deduct a securities borrowing and return stamp duty from your account, which will be refunded once the IRD approves your application. For more information about the stamp duty, please click here.

3. Register with the IRD

Airstar will register the Stock Borrowing and Lending Agreement on the GovHK website on your behalf and keep you updated on the application results. Once the IRD approves your application, we will notify you via in-app message.

Note: If the IRD rejects your application, you can no longer sell short Hong Kong stocks, and Airstar, as the lender, will not refund the short-selling application fee or stamp duty to you, as the borrower.

2.2 Activation After Approval

Complete the three following steps:

1. Sign Agreement

You must read and sign the Stock Borrowing and Lending Agreement with Airstar, which will only take effect once all procedures are completed.

2. Pay short-selling application fee

For your convenience, Airstar will register the agreement and pay the short-selling application fee on your behalf. You will need to authorize Airstar to deduct the short-selling application fee from your account, based on the Max BP in your account.

Note: When deducting the short-selling application fee, Airstar will check the Max BP amount in your account, not the Withdrawable Cash amount. By agreeing to pay the short-selling application fee, you confirm that you will use margin if your account lacks sufficient cash, and will cover any resulting charges and interest.

Once the short-selling application fee is paid, your short-selling permission will be activated, and you can then start selling short Hong Kong stocks. When you sell short, Airstar will deduct a securities borrowing and return stamp duty from your account, which will be refunded once the IRD approves your application. For more information about the stamp duty, please click here.

3. Register with the IRD

Airstar will register the Stock Borrowing and Lending Agreement on the GovHK website on your behalf and keep you updated on the application results. Once the IRD approves your application, we will notify you through an in-app message, and you'll be able to sell short Hong Kong stocks.

While waiting for the application result, you can also choose Real-Time Activation at any time.

Note: If the IRD rejects your application, you will not be able to sell short Hong Kong stocks, and Airstar, as the lender, will not refund the short-selling application fee to you, as the borrower.