Short Selling FAQsWhat is the new policy?On 21 September 2008 ASIC decided to prohibit the creating or increasing of naked or covered short positions in all ASX listed shares. What is the difference between 'naked' and 'covered' short selling?Naked short selling involves the sale of stock without a stock lending agreement in place. It is important to note that IG Index only ever participates in covered short-selling to hedge our client’s positions. This means that where there is always a binding stock lending agreement in place with our hedging brokers. How long will these restrictions last?ASIC will reassess the new rules surrounding both naked and covered short-selling in 30 days and advise the market, whether or not it will at that time, or a later date, it will reopen covered and/or short sales for Australian stocks. What if I already have an existing short position in an Australian stock?You can keep your position open but you cannot increase your short position any further. Under certain circumstances when borrowing restrictions arise, as detailed in our Customer Agreement, this may not be the case and your position may have to close prematurely. Could I mistakenly open a new short stock position?We have adjusted our systems to impose restrictions on all Australian stocks. Will I have any difficulties closing long positions in Australian stocks?No, selling to close an open position is not short selling and is completely unaffected by these changes. Are other markets outside of Australia going to be affected?UK US Countries which have now followed are France, Germany, Switzerland, Ireland and Canada (Ontario), and other regulators are assessing their responses. Any Questions?Freecall 1800 601 700 |
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