The cost associated with the short-selling ban is likely to be more than $300 million, according to fund manager Plato Investment Management.

The restrictions reduced trading volumes and led to higher transaction costs, Plato Investment Management managing director Don Hamson said in a report that was sent to ASIC and Treasury before the ban was lifted on 25 May.

Reduced trading volumes resulted in fewer commissions for brokers, while an increase in bid/ask spreads led to higher transaction costs, he said.

Based on a brokerage commission of 10 basis points and an increase in spreads by 8 basis points, the ban would have resulted in $1 billion in missed revenues on an annualised basis.

"You can always argue that the brokerage commission should be higher or lower, but I think it is a reasonable estimate," Hamson told InvestorDaily.

But the short-selling ban was only fully in place for two months, not 12 months, while financial securities could not be sold short for another six months.

Assuming financials take up around 30 per cent of the market, the cost of the ban over the period it was in place amounted to $315 million.

Hamson said the real cost of the ban is likely to be higher because his calculations do not take into account the effect it had on the economy.

"The economic cost of banning short selling is likely to have further fuelled the already deteriorating economic and financial environment," he said.

Plato manages several funds that use short-selling strategies.