AIMA

Short Selling

Short selling has been a topic of intense regulatory and legislative scrutiny since a number of countries introduced bans in the wake of the financial crisis. 

In the USA, having eliminated all short sale price test restrictions in July 2007, the SEC introduced an ‘alternative uptick rule’ in 2010 and has recently consulted on  the feasibility, benefits and costs of requiring short position reporting of publicly listed securities. 

In the EU, while a number of Member States have introduced temporary bans on the taking of net short positions in the stock of specified financial institutions, a harmonising Short Selling Regulation (SSR) has been agreed.  It is expected to be implemented throughout the EU from 1 November 2012.

In Hong Kong, the SFC has recently published two consultation papers on short selling reporting, and is considering the possibility of creating a centralised stock borrowing and lending facility.