Short Selling - ASIC - a small step forward?

Back in January, I posted here the text of a letter to ASIC complaining that short selling was "a grossly unfair corruption of the otherwise orderly market" and asked ASIC "to change the rules and regulations as soon as possible to remove short selling from the main market". I also said here that I would "try to remember to post the final outcome when it comes".

Well, I have the final outcome. There is a small step forward - ASIC have gone about as close as they could to admitting that short selling does indeed put extra shares into the market. They say "I understand the point you have made regarding your view that the practice of securities lending and short selling has the same effect as the issuance of new shares." I hope that the those on HC who resolutely refused to understand the argument will at least re-think this bit.

Needless to say. ASIC would not budge on the practice, citing the acts and regulations under which it takes place, and saying that "covered short selling is a legitimate mechanism for price discovery and liquidity, subject to strict securities borrowing and reporting obligations". The next step will be to try to get the issue taken up by the politicians. This likely won't get anywhere while there's a federal election in the offing, but I'll try to pursue it later in the year.

[I'm posting this comment on the same boards as before - SGH, MND, JBH, MTS, WSA, MYR. I'm posting separately as I can't see a way of posting on multiple boards.]