Hong Kong’s Securities and Futures Commission (SFC) has launched an investigation into suspected illegal short selling activities. The regulator is examining trading data to identify any potential market manipulation or breaches of regulations.

The SFC’s move comes amid concerns about increased market volatility and the potential for abusive trading practices. Short selling, while a legitimate investment strategy, can be used illegally to drive down stock prices.

The investigation will focus on identifying any instances where short selling may have been used to manipulate the market or to take advantage of inside information. The SFC has the power to impose significant penalties on those found guilty of illegal short selling, including fines and imprisonment.

The SFC has not provided details on specific companies or individuals targeted by the investigation. However, the regulator has stated that it is committed to maintaining the integrity of the Hong Kong stock market and will take action against any individuals or entities found to be engaging in illegal activities.