FYI | May 25 2009
By Rudi Filapek-Vandyck
The ban on short selling financial stocks in Australia ends from the moment the share market resumes trading today, the Australian Securities and Investments Commission (ASIC) said in an announcement released this morning.
In the statement, ASIC says it “has reviewed market conditions and considers that the balance between market efficiency and potential systemic concern has now moved in favour of the ban being lifted.
“In reaching this view, however, ASIC notes that the global financial crisis and global recession continues to place pressure on Australia’s markets. ASIC will not hesitate to reimpose the ban immediately (using its enhanced and clarified powers under the Corporations (Amendment) Short Selling Act 2008) and without consultation if it considers market conditions warrant such action. ASIC will, in its monitoring of the market along with ASX, pay particular attention to short selling activity by participants (including activity by hedge funds and similar institutions) which could potentially harm Australia’s financial system.”
The daily reporting by market participants to the Australian Stock Exchange of gross short sales will continue as will the publication to the market of aggregate short sales the day after trading.
This disclosure regime will operate until the commencement of the Government’s permanent disclosure measures, according to ASIC’s statement.
