asic comprehensive asx shorting ban

Succinctly, I believe ASIC is reported on the ABC News and elsewhere, to have decided to comprehensively ban short sales, covered or not, for all listed ASX stocks, for 30 days initially, from the opening of the market tomorrow Monday, 22nd September, 2008.

Trevor Chappell. AAP. September 21, 2008 06:26pm Edited Extract reporting further details:

"The corporate regulator today extended its ban on the short-selling of shares to bring the Australian share market into line with global peers and to curb excessive market volatility.

ASIC said the US and UK moved late last week to ban covered short sales in financial stocks and had been followed by France, Germany, Switzerland, Ireland and Canada.

Other regulators are assessing their responses.

"These developments which, in effect, restrict short-selling activity in these markets, intensify the risks on the Australian market," ASIC said.

"Put simply, because global funds can move quickly, the risk of unwarranted activity on the Australian market has intensified.

"This intensity has been assessed by ASIC in the context of the small size, relative to other markets, of the Australian market, and the structure of our market."

ASIC said it had therefore decided to ban covered short sales for all listed stocks from the opening of the market tomorrow.

The corporate regulator said it would reassess the ban and advise the market in 30 days whether or not it would re-open covered short sales for non-financial stocks.

"These measures are necessary to maintain fair and orderly markets in these exceptional times of global crises of confidence in financial markets," ASIC chief Tony D'Aloisio said.

"Because of the relatively small size and the structure of the Australian market, it is necessary to extend the prohibition to all stocks.

"To limit the prohibition to financial stocks, as has been done in the UK, could subject our other stocks to unwarranted attack given the unknown amount of global money which may be looking for short sell plays."

ASIC said there was a legitimate place for short-selling in markets, but in the current climate and in light of the actions taken by other regulators, a circuit breaker was needed to help maintain and restore confidence.

"Our measures do that as they will operate for a limited time and in the case of non-financial stocks, will be reviewed in 30 days," he said.

"In the case of financial stocks, the review will be in line with the time limits imposed by other international regulators such as the US and UK."