short selling banned - bill passed in senate

AAP
December 04, 2008 08:50pm

PERMANENT restrictions will be placed on the stock market practice of short selling under a bill passed by Federal Parliament today.

The legislation, which passed the Senate tonight, bans so-called naked short selling and provides greater scrutiny of covered short selling.

Put simply, short selling is where investors sell shares that they don't own, on the assumption that they will fall in value.

The bill also expands the Australian Securities and Investment Commission's powers.