thursday thoughts, page-71

And this from the Milky Bar Kids office !

Australia moves to extend restrictions on short-selling of shares

Thursday November 13, 2008, 3:57 pm


SYDNEY (AFP) - Australia plans to impose permanent restrictions on short selling of shares to prevent market manipulation and abuses amid the global financial crisis, the government said Thursday.

Draft laws introduced to parliament will ban so-called naked short selling and provide for greater scrutiny of covered short selling, said Corporate Governance Minister Nick Sherry.

The legislation aims to provide certainty to markets beyond the expiry of parts of a temporary ban on all short-selling imposed in September.

The Australian Securities and Investments Commission (ASIC) imposed the ban after similar crackdowns in the United States and some European markets as regulators acted to defend troubled financial services sectors.

"In the current global financial crisis, there has been a need to take decisive action, particularly where we see some trading practices that involve manipulation or abuses," Sherry told reporters.

Short-selling occurs when investors sell shares they do not yet own in order to profit later from an anticipated fall in prices -- often contributing to the price fall.

The overall ban on the short-selling of stocks is due to expire on November 18, while a ban on short-selling financial stocks runs until January 27.

"It is important that we have certainty going forward when this ban is lifted, if that's the decision that ASIC takes next week," Sherry said.

The legislation would be introduced into parliament later Thursday and it was hoped that it would be passed by early next month, he said.