cdu shorting activity, page-431

Hi Michael Douglas,

It would appear that short selling reporting is inaccurate and unable to be effectively supervised.

Disclaimers on the ASX and ASIC websites are as follows:

ASX - Short sales report: No responsibility is accepted for any inaccuracies contained in the matter published.

ASX - Stock lending reports: ASX accepts no responsibility for any inaccuracies in the matter published.

ASIC - Open short report: It is importanbt to note that ASIC's aggravated short position reports we receive from individual short clients are reliant on the accuracy of reports we receive from individual shjort sellers. While we will monitor compliance with short positions reporting and provide additional guidance where necessary, we are unable to verify the accuracy of all individual reports submitted to ASIC, nor to verify that all short sellers in our market (both in Australia and overseas) are lodging reports.
Disclaimer: No responsibility is accepted for any inaccuracies contained in this matter published.

Neither body seem to be able to deliver market integrity.

Also, short selling settlements do not always follow market processes, perhaps by-passing the register with some other "informal" way of keeping control over the ownership of stock and the obligations between lenders and borrowers satisfied.

Thirdly, we find Institutions are not only engaged in lending their shares, but also involved with buying the shares as they are sold short.

These matters raise questions that have implications for the fairness and integrity of the market. In my case CDU shares. The recent High Court ruling should give ASIC a powerful new weapon to use against people who trade shares to deliberately influence trading on the ASX.


cheers,

Max