ASIC has revealed the new reporting requirements for short-sellers of equities, when the current ban on the practice involving non-financial stocks is lifted on November 19.
From that date onwards, participants in short-selling will have to keep a record of whether the sale is a Long Sale – one involving securities they already own, a Short Sale – being a covered short sale, or an Exempt Short – a transaction that falls under the exception rules to the ban.
Short-sellers will also need to inform a financial services licensee when a sale order is for a short sale. Their broker would qualify in most situations.
Short-sellers will also be required to report all of their short sales to the Australian Securities Exchange (ASX).
Under the new regime, ASIC and ASX will produce daily reports detailing short sales made the previous day.
Participants will be required to: inform ASX they have advised their clients to disclose all of their short sales, detail the types of short sales that have taken place, and forward all of this information to ASX in regard to sales that took place before 7pm, by 9am the following morning.
The ASX’s daily short-selling report will be issued after 9am on each trading day, and will show by security the total volume of short sales made during the 24 hour period to 7pm of the previous day.
Unsettled short positions opened on a day prior to the reporting day will no longer be detailed.
ASIC and ASX are working with trading participants to make the new reporting arrangements as seamless as possible.
