The continuing effects of the global financial crisis have
resulted in what some have called unprecedented turmoil in
financial markets. Some of the volatility in stock markets has been
blamed on short selling.
Short selling is an activity whereby an entity enters into an
agreement to sell a security that it does not currently own. A
'covered' short sale occurs when the seller has arranged to
borrow the security in order to meet their delivery obligations
prior to entering into the agreement to sell the security. A
'naked' short sale occurs when the seller has not arranged
to borrow the security it intends to sell at the time of the sale,
but intends to do so later to meet its delivery obligations. In
response to foreign jurisdictions imposing emergency restrictions
on short selling, ASIC has acted promptly to protect
Australia's position by banning short selling for 30 days from
22 September. In the interim, ASIC has issued a number of class
orders providing for
