asic ready to ban short-selling ...

About time ... it's destroying the industry & the big and little investors imo!
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[Source: www.smh.com.au/breakingnews]

ASIC ready to ban short-selling
September 24, 2012 - 5:45PM
Chris Zappone
Reporter, Business Day

Australian regulators are ready to ban short-selling shares if markets descended into the kind of chaos seen around the time of the global financial crisis.

The Australian Securities & Investments Commission pledged to impose a ban on the practice of short-selling, essentially profiting from stocks price falls, should market conditions require it again, the regulator said.

"If a situation arises in the future that involves disorderly markets and action by regulators in other jurisdictions to further restrict short-selling, it is likely that ASIC and the Australian Government would again contemplate a ban on short selling to bolster investor confidence and limit the potential for international regulatory arbitrage," the regulator said today.

The warning came as part of a review of a temporary short-selling ban imposed by ASIC on all stocks from September 2008 to November 2008, when shares plunges were further exacerbated by investors looking to profit from volatility.
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The ban on short-selling for financial stocks, whose health is interwined with the overall stability of the nation’s financial system, lasted until May 2009.

"At the height of the global financial crisis, we identified a significant risk that excessive, speculative short selling could have unwarranted, negative consequences for Australia’s markets and economy more broadly," said ASIC deputy chairman, Belinda Gibson.

"ASIC was concerned that global market conditions, coupled with extensive short-selling of stocks, particularly financial stocks, may have been causing unwarranted price fluctuations," she said. "If left unchecked, we were concerned that the fair and orderly operation of the stock markets may have been threatened."

Short-selling remains a controversial practice, with critics contending it adds to volatility, while its defenders say it aids price discovery in the market.

Iron ore miner Fortescue plunged 14 per cent in a few hours on September 13, as short-sellers seized on news that the company was renegotiating its debt covenants with its creditors.


Ends.