The Crest of the Commonwealth of Australia Treasury Portfolio Ministers
Picture of Nick Sherry

Nick Sherry

Minister for Superannuation and Corporate Law

3 December 2007 - 8 June 2009

Media Release of 05/12/2008

NO.084

Short Selling Bill Passes the Parliament

Senator Nick Sherry, Minister for Superannuation and Corporate Law, has welcomed the successful passage through Parliament - unamended - of critical legislation to ban naked short selling, expand the corporate watchdog's powers and require the disclosure of short selling.

"This Bill stands to protect retail investors and Australian companies by enhancing market transparency, integrity and certainty."

"The Bill survived a serious threat from the Opposition in the House of Representatives where they tried to wipe out the requirement for disclosure."

"By the time the Opposition in the Senate addressed the Bill they had seen that this measure was about certainty for our market and transparency for Australian investors."

"The successful passage of this measure means that market certainty is restored and Treasury can commence further detailed consultations with industry about the details of the Regulations."

"Under the new regime, market players are left in no doubt that naked short selling is banned, while covered short sales must be disclosed to the regulator," Minister Sherry said.

The unamended Corporations Amendment (Short Selling) Bill 2008 includes three key measures:

  • a legislative ban on naked short selling;
  • a clarification and expansion of the Australian Securities and Investment Commission's powers, and
  • a comprehensive disclosure regime for permitted covered short selling, including placing a positive obligation on brokers to enquire of a client whether a sale is a covered short sale when a client places an order, and a direct obligation on market operators to publicly disclose short selling information they obtain from brokers;

The Bill will become law upon Royal Assent early in the New Year.

CANBERRA
5 December 2008