ASIC Lifts Ban on Covered Short Selling

From today covered short selling of non-financial stocks is allowed again on Australian stock markets. Obviously if you are a short seller you’ve known this for a week. What does it mean to us?

The disclosure and reporting details are in this Market Advice. Australian Securities and Investments Commission – Requirements for disclosure and reporting of short sales from 19 November 2008.

So naked shorts are still banned. Naked shorts means the seller has not yet borrowed the shares before placing the sell order. The seller expects to borrow or buy the shares in order to deliver on the trade.

Covered shorts are allowed for non-financial stocks. Covered shorts means the seller must actually borrow the shares before placing the sell order.

The financial stocks that are still banned from covered short sales are listed at the end of this post. But of course there are some exemptions to that ban

From today all sell orders must be identified as either long sale, short sale (for non-financial stocks) or Covered short sale exempt (you knew there would be an exemption somewhere for financial stocks). Sellers are required to indicate which category their order matches.

Ticker Name
ABP Abacus Property Group
AMP AMP Ltd
ASX ASX Ltd
ALZ Australand Property Group
ANZ Australia & New Zealand Banking Group Ltd
AUW Australian Wealth Management Ltd
AXA AXA Asia Pacific Holdings Ltd
BCM Babcock & Brown Capital Ltd
BJT Babcock & Brown Japan Property Trust
BNB Babcock & Brown Ltd
BOQ Bank of Queensland Ltd
BEN Bendigo and Adelaide Bank Ltd
BWP Bunnings Warehouse Property Trust
CER Centro Retail Group
CFX CFS Retail Property Trust
CGF Challenger Financial Services Group Ltd
CBA Commonwealth Bank of Australia
CPA Commonwealth Property Office Fund
DXS Dexus Property Group
FKP FKP Property Group
GMG Goodman Group
GPT GPT Group
HGG Henderson Group PLC
HFA HFA Holdings Ltd
IIF ING Industrial Fund
IOF ING Office Fund
IAG Insurance Australia Group Ltd
IFL IOOF Holdings Ltd
LLC Lend Lease Corp Ltd
MCW Macquarie CountryWide Trust
MDT Macquarie DDR Trust
MQG Macquarie Group Ltd
MOF Macquarie Office Trust
MGR Mirvac Group
NAB National Australia Bank Ltd
PPT Perpetual Ltd
PTM Platinum Asset Management Ltd
QBE QBE Insurance Group Ltd
SGB St George Bank Ltd
SGP Stockland
SUN Suncorp-Metway Ltd
SDG Sunland Group Ltd
TSO Tishman Speyer Office Fund
TAL Tower Australia Group Ltd
VPG Valad Property Group
WDC Westfield Group
WBC Westpac Banking Corp
Five additional Securities (being APRA regulated businesses)
WES Wesfarmers Limited
ROK The Rock Building Society Limited
WBB Wide Bay Australia Ltd
FCL Futuris Corporation Limited
CIX Calliden Group Limited

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