Australian short selling ban goes further than other bourses

The Australian stock exchange opens today with a total ban on short selling.

The surprise move was announced last night, after a less restrictive ban on “naked” short selling – shorting without actually owning the shares – was revealed on Friday.

Now, “covered” short selling – in which traders borrow shares to short – is included too.

ASIC has followed in the footsteps of regulators in the US and the UK, which moved late last week to ban short sales in financial stocks.

Other countries to follow suit include France, Germany, Switzerland, Ireland and Canada (Ontario).

But the Australian ban covers all 2600-odd stocks on the ASX bourse.

The decision not to limit the ban to financial stocks, was taken out of concern that if short sellers could not access those stocks, they would target other sectors.

“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 chairman Tony D’Aloisio said.

The list of Australian listed companies to have their share price ravaged by short selling this year includes Macquarie Bank, ABC Learning Centres and Babcock & Brown.

Mr D’Alosio said that in light of the action taken by other regulators, the ASX needed a “circuit-breaker to assist in maintaining and restoring confidence".

The ban lasts for the next 30 days.

 

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23 Comments & Questions

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The ban on short selling should not be limited to just 30 days but extended indefinitely. This is a practice that should be outlawed completely in any stock exchange which is, or wants to be, well respected.

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Short selling is just another form of GAMBLING, and banning it altogether will give more confident to all small investors!

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Well everybody seems to have found the source of the problem. Continue dreaming... To ban short selling will not solve a bit of the trouble we are in at the moment. The possibility to shorten a product will give far more liquidity in the markets and all the guys who somewhere would like to buy a share and have to pay a price much higher than what they think they wanted to pay will realize that for a liquid market you need sellers too.

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Why do clueless idiots believe these kinds of rules are a positive? Ummmmm...yep...b/c they don't understand what short selling does. Now you have ripped up the floor. CRASH!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!!

BWAHAHAHAHAHAHAHAHAHAHA!

You can't stop what is coming...keep telling yourself everything is ok and big daddy gov't will save you...but they can't.

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Derivative traders are often the wisest and most experienced people in the market, and they go short on stocks maybe 3-6 months early when they see a trend developing.

Short selling will help provide liquidity when you need to escape from your failed investments! That day is coming, very, very soon, my over-leveraged global investor ...

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If I was to sell my house without informing my motgagee, I think they'd have something to say about it, and the purchaser might not be happy that they were buying an encumbered asset.

I'm a complete layman, but there's another word for short selling...

FRAUD!

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Hi all. The better part of valor is discretion, in the which better part I have saved my life.
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This doesn't make sense. Ruin a career for ten grand?There must be more to this, It should be investigated further.
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Why would he ruin his career for only $10k? NBR should dig deeper and see if there is more to this story.
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Mark was working for an employer who chronically lacks documentation abilities and twists his wrongs in his favour and was a crook. More importantly the employer set him up as Mark refused to do any extra work without pay and the relationship went sour.
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This was all a big vandate against Mark B and shamefully, NZ Justice system failed Mark and its pitiful that Kerry NZ got away with it.
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Read the case, investigate the truth of whats published and what actually happened. Find out the types of people Mark B was dealing with first. Then you will be in a better positions to make a sound judgement.
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You seriouly don't know what you are talking about. Get some education before making 'simple' comments.
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agree. Mark B was getting paid 165k pa.
why will he try to embezzle 10k prorated over 12mths. This amounts to nothing in a biweekly pay packed as he was on the highest tax bracket.
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And you are so right, that there must me more it to the story. And yes there is. Mark was working for crooks and those crooks are no longer in same business. Doesn't that itself speaks volume.
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This was all a personal vandate becasue Mark did not want to stoop to their gutter level of doing business or compromise his CPA designation then but it will probable cost him now after this debacle.
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