short selling reforms too late for mfs and ocv, page-11

Ike,
read this,
ASIC extends short-selling ban
By Trevor Chappell
AAP
September 21, 2008 06:26pm


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.
Short-selling is where investors sell a share they do not own in the expectation of buying it later at a lower price and thereby making a profit.

Short-selling has been partly blamed for the recent sharp falls of stocks such as Macquarie.

On Friday, the Australian Securities and Investments Commission (ASIC), in consultation with the Australian Securities Exchange, placed a ban on naked short-selling, effective from tomorrow. The ban will now be extended to covered short-selling.

Naked short-selling involves selling without first borrowing the stock, or even ensuring they can be borrowed.

Covered short-selling is where the seller has borrowed the shares they are selling.

"The measures being taken by ASIC are an appropriate response to global financial market turbulence," federal Treasurer Wayne Swan said.

"They will help protect investors as well as the integrity of our financial markets."


ASIC said that since its announcement on Friday, it had continued to assess moves by other international regulators in relation to short-selling.

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."

WHY is the whole global market doing this?
Because short selling on a massive scale can undermine the whole market and the whole market is not bankrupt UNLESS SP destruction reduces the values so much that DEBT BECOMES DUE AND PAYABLE IMMEDIATELY.
TAX is due by all companies if they run at a profit DAHHHH!
but MFS was forced to repay debt that wasnt due for years and now cant pay taxes on past PROFITS.Got it? profits...
I think you have missed the whole concept.

Never mind IKE just keep thinking our Directors in fact the whole loody worlds directors have done the wrong thing OK. Get a placard and start waving..meanwhie Capitalism is at risk of destruction. OMG.

PS I started thinking that MFS was flimsey a long time ago and I believed the model was crook...stella was grosely misunderstood and now PIF looks a loser too...and I dont like the buying of NZ financial advisors to peddle your product ...still could all go towards a profitable co BUT

BUT the abrupt downfall of MFS could involve much more than that....and the banning of short selling especially naked short selling...do you understand that a few brokers could trade a stock down and not even own or loan any of shares???
Kytsym expressed it well.. IKE.. US UK and ASX see the problem and are banning it[ which will have enourmous impact on hedge funds etc].. when will you understand how it could be used by destructive coordinated trading.

Too late for a whole group of Companies IMHO.
IKE I dont blame small short sellers but powerful players can destroy the market imo.