Short-selling ban extended to end of May
The Australian Securities and Investments Commission (ASIC) has extended the ban on covered short-selling until the end of May.
The regulator, which imposed the original ban on short-selling in November last year, said it decided to extend the arrangement after weighing up the continued volatility in global financial markets and the potential damage from aggressive or predatory practices from short-selling against the possible loss of some market efficiency or price discovery.
However, the decision means that the Australian ban on short-selling has extended well beyond that imposed in the United Kingdom, which was lifted earlier this year.
ASIC said it decided to continue its cautious approach and keep the ban in place on the basis that it judged any loss of market efficiency or price discovery as justified.
The regulator said its decision had been based upon its own extensive research and analysis and input from other regulators and a wide cross-section of market participants.
AUTHOR
Mike Taylor
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