not approved for shorts, page-23

Encore,
If there is a pre existing share lending and return agreement between a lender and a borrower then the ASX is generally unable and not authorised to become involved in the short selling that may occur as a follow up to the signed agreement. Quite possibly there is a lending agreement between Global and the “shorter”, possibly HSBC.
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The legislative regulation of short selling is primarily dealt with in section 1020B of the Corporations Act, in conjunction with Section 19 of ASX market rules.

Short selling can take the form of either ‘naked’ or ‘covered’ short selling.

The ASX approved list that we are generally aware of deals with the activity of “naked” short selling, but , due to gaps in legislation , the ASX cannot adequately control and legislate the activities of “ covered” short selling.

It is generally agreed that a ‘naked’ short sale is a sale where the seller does not own and has not borrowed or arranged to borrow securities at the time of the sale, but intends to purchase or borrow securities in order to meet the three business day (T+3) settlement obligation.

The legislative gap or loophole that currently exists in relation to short selling is that the prohibition is widely considered not to extend to sales of securities at a time when the seller owns such securities, even if the seller only owns them by virtue of having entered into a typical stock borrowing arrangement.

Under such arrangements, the borrower actually purchases the securities from the lender, and contracts to re-sell the same number of securities to the lender at a specified time or on demand by the lender/seller.

The Corporations Act requires a person to tell their broker if they are placing a sale order which is a short sale. However, a client who has borrowed shares under an agreement may take the view that their sale is not captured by the short selling provisions at all.

Where this is the case, the client may take the view that they are not bound by any of the short selling regulations (including the requirement to notify the broker of a short sale).

As a result of stock lending being typically undertaken through these sale/purchase arrangements, the legislative provision dealing with reporting of short sales potentially has no application to many covered short sales (in which the ‘short seller’ may not be ‘short’ but may be the beneficial owner by the time that it effects the ‘short sale’) because the prohibition does not apply to transactions in which the seller has, at the time of the sale “a presently exercisable and unconditional right to vest the products in the buyer.”


Some recent ASX info
http://www.asx.com.au/about/pdf/short_selling_public_consultation_paper.pdf