Short Selling - Aussie ban update

[aussieshort.com]

We have had a fair few enquires as to the status of short selling in Australia, thus we thought it would be beneficial to attach the ASIC announcement from November 13th.


AD08-65 ASIC lifts ban on covered short selling for non-financial securities

ASIC today said it would, as expected, lift the current ban on short selling of non-financial securities from opening of trading on 19 November 2008 but would continue the ban on covered short sales in financial securities.

ASIC put a 30-day ban on covered short selling of securities on 21 September and extended this ban on 21 October as market conditions remained difficult.

The ban on short selling of financial securities will remain in place until at least 27 January next year, consistent with many other jurisdictions, while ASX will maintain the ban on naked short selling indefinitely. ASIC confirmed that financial securities would be those comprising the S&P/ASX 200 Financials (including property funds) plus five other APRA regulated businesses.

Key details

ASIC announces the following effective from Wednesday 19 November:
1. Covered short sales of non-financial securities will be permitted;
2. The ban on covered short selling of financial securities will continue until 27 January 2009. Financial securities are those comprising the S&P/ASX 200 Financials and five additional securities (being those with APRA regulated businesses).
3. Existing exemptions for covered short selling, for example those relating to hedging and arbitrage transactions, will continue in relation to financials; and
4. The facilitation of the sale of securities being recalled from a stock-lending program (whether or not they are financials) will also continue.

I hope you find this useful.
Regards,

 

[noirua]

After the rout of the British banks on the end of the short selling ban, we must ask: Would Aussie banks collapse in price on the end of a short selling ban?