Nick Sherry
The Federal Government has given the financial services industry four weeks to respond to the legislation it intends will underpin short-selling arrangements in Australia in the future.
The Minister for Superannuation and Corporate Law, Senator Nick Sherry, has released the Corporations Amendment (Short Selling) Bill, the legislative package that will govern the short-selling regime when the existing 30-day ban is ultimately lifted.
The legislation is intended to address any ambiguity around covered short selling and will require the disclosure of transactions where a seller has entered into a securities lending arrangement to cover a sale.
According to Sherry’s statement, the legislation will, in particular, require that covered short sales be disclosed by sellers to a financial services licensee who in turn would be required to disclose the position to the market operator.
Further, financial services licensees trading on their own behalf will be required to disclose covered short sales directly to the market operator.
Sherry said that the draft legislation would be supplemented by regulations covering more detailed aspects of the disclosure requirements and would be able to reflect changes in market and trading behaviour.
