Shooting the messenger: The ban on short selling

The Center for Independent Studies
Publication Type:
2010, pp. 1 - 40
Issue Date:
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Bans on short selling financial stocks were implemented in a number of stock markets around the world at the end of September 2008. In Australia, a ban on `naked short selling (see below for definition) was announced by the Australian Securities and Investments Commission (ASIC) on Friday, 19 September, to take effect from the following Monday. Over the weekend, however, ASIC changed its mind. On Sunday, it announced that the ban would also extend to covered short sales of all listed stocks for a period of 30 days. In announcing the decision, ASIC said: Recent market global conditions, coupled with extensive short selling of stocks, particularly financial stocks, may be causing unwarranted price fluctuations. These fluctuations if unchecked, threaten the operation of fair and orderly stock markets.
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