Financial Securities: short selling ban extended again
In our January update ‘Covered Short Selling Ban further extended’ , we reported that the Australian Securities and Investments Commission (ASIC) had announced a further extension of its ban on covered short selling of financial securities until Friday 6 March 2009, increasing the extension already made on 18 November 2008.
ASIC today announced its plan to keep the ban on covered short selling of financial securities in place until 31 May 2009 but will keep this position under review. Although ASIC admits the usefulness of short selling for market efficiency or price discovery, it justifies the ban with the need to balance the continued volatility in global financial markets and the potential damage from aggressive or predatory practices possible with short selling.
ASIC states that it has conducted extensive research and had input from other regulators and market participants in making this decision. ASIC will continue to monitor the operation of the ban and has issued a warning that it will not hesitate to act if it finds conduct which seeks to circumvent it.
We will provide you with further updates as these matters develop.
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Further to our update ‘Covered short selling ban extended’, the Australian Securities and Investments Commission (ASIC) yesterday announced a further extension of its ban on covered short selling of financial securities until Friday 6 March 2009. This was also in addition to its extension made on 18 November 2008 which was due to expire on 27 January 2009.