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ARTICLE · 14 JUNE 2021

ASIC publishes INFO255 to establish rules for activist short sellers

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INFO255 sets out what ASIC regards as 'better practices' for activists and target companies in an activist short campaign.

AustraliaFinance and Banking
Justin Fox
Justin Fox
Andrew Lumsden
Andrew Lumsden
Lauren Midgley
Lauren Midgley
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While ASIC information sheet INFO255 is a welcome attempt to establish workable rules for 'activist short sellers', we query whether the guidance appropriately balances the interests of activists and their targets.

Activism has become a ubiquitous feature of the Australian public equities landscape. This includes so-called 'activist short campaigns', where the holder of a short position releases a 'short report' to support its view of overvalue, and trusts that the market will agree with its thesis (in which case the activist will profit on the subsequent share price fall). ASIC has rightly focused on the need to ensure that these reports are not misleading, incomplete or unsubstantiated.

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