THE AUSTRALIAN securities regulator yesterday lifted its temporary ban on short-selling of financial stocks after eight months.
The Australian Securities & Investments Commission (ASIC) became the final major market to end the ban, but warned that it could immediately reintroduce the ban, or fresh restrictions, if market conditions warranted it.
“ASIC has reviewed market conditions and considers that the balance between market efficiency and potential systemic concern has now moved in favour of the ban being lifted,” the regulator said.
ASIC imposed the ban last September amid similar measures taken by regulators in New York and London in response to the collapse of US investment bank Lehman Brothers.
The regulator lifted its ban on short selling of non-financial shares, but then twice extended the ban on the shorting of financial shares, despite criticism from industry veterans that the constraints did little to prevent market volatility.