The Australian Securities and Investment Commission (ASIC), Australia’s financial regulator, has further extended its short selling ban for financial stocks due to continued volatility.
The ban, originally due to end on Friday, will now be kept in place until 31 May, although ASIC has said this would be under constant review.
“In making its judgement to again extend the ban, ASIC weighed up the continued volatility in global financial markets and potential damage from aggressive or predatory practices from short selling against the possible loss of some market efficiency or price discovery,” read a statement on ASIC’s website.
“ASIC has decided to continue with its cautious approach and keep the ban in place; its judgement continues to be that any possible loss of market efficiency or price discovery as the result of the continuation of the ban is justified given the current market circumstances.”
ASIC has reviewed its short selling rules a number of times since a ban was first imposed in September last year. Restrictions for non-financial stocks were lifted on 19 November last year. An indefinite ban for naked short-selling and stringent new disclosure laws for investors holding short positions were also installed last November.