After close of trading on Friday 19 September, 2008, ASIC announced a series of measures banning naked short selling in all ASX listed securities, and providing for daily reporting of covered short positions to the ASX.   The ban was introduced as an interim measure for 30 days pending the release by the Federal Government of the new draft Bill relating to Short Selling, was in response to similar action taken by the FSA in the UK and by the SEC in the US, and was designed to act as a circuit breaker in view of the current state of the share market both here in Australia and globally.

On the evening of Sunday 21 September, 2008, ASIC widened the ban to extend to all short selling, including covered short sales.  These events have been the subject of considerable discussion in the media

As soon as permissible after the announcement of these measures, SDIA notified members and requested details of any potential consequences or difficulties arising from the ban.  During the course of Monday 22 September, SDIA provided a lengthy list of issues to ASIC, and later conducted discussions with ASIC staff with a view to resolving those issues.

Following these discussions, ASIC issued further clarification on 23 September, 2008, including stating its position on granting relief and no action positions in respect of a range of stockbroking activities, including market making, exchange traded options activity, client facilitation, hedging, dual listed stock arbitrage and Direct to Market Access (DMA) trading for retail clients.  ASIC has also subsequently issued Class Orders varying the original banning instruments, as well as additional clarification of other issues.

ASIC has set up a single web page on its web site containing all relevant Releases and Instruments relating to the short selling prohibitions.  To access this page, please go to:

http://www.asic.gov.au/asic/asic.nsf/byheadline/Short+selling?openDocument

SDIA has been in daily contact with members and with ASIC to resolve any issues that come to light, and to put forward the position of the stockbroking industry on the question of the interim ban generally.  SDIA is also reviewing the Draft Corporations (Short Selling) Amendment Bill 2008, released for comment on 23 September 2008, and will be seeking the views of members on that Bill.