The Australian Securities and Investments Commission has released regulatory guidance to assist with compliance with new legal requirements under the Corporations Act 2001 and Corporations Regulations 2001 in relation to short selling.
ASIC’s guidance is contained in a revised version of Regulatory Guide Short selling 196, which clarifies the legal position about what short sales are permitted, as well as specific reporting and disclosure obligations.
It contains an overview of short selling concepts and new provisions in the Corporations Act as a result of the changes to the legislation about short selling, and various relief that ASIC has granted in relation to some of these provisions, in certain circumstances.
RG 196 outlines the two types of reporting obligations – reporting of short sale transactions and of short positions – as well as an exemption from reporting short positions below a certain threshold.
It also clarifies ASIC’s policy for granting relief to allow naked short selling in some circumstances.
In September 2008, ASIC took emergency action to temporarily ban short selling in Australia, including naked short sales and covered short sales. The ban on covered short selling of non-financial securities was lifted on 19 November 2008. The ban on covered short selling of financial securities was lifted on 25 May 2009.
