Nick Sherry (Tasmania, Australian Labor Party, Minister for Superannuation and Corporate Law) Share this | Hansard source

If Senator Abetz will be patient, I will get to the banning. He, obviously, is very unfamiliar with the issue. That gap was left open since 2001. As a result of that gap, there is currently no legislatively backed and system-wide disclosure of covered short selling. This has created uncertainty and is damaging to market confidence, which has been magnified by the current volatility and uncertainty that we have seen. So today I have announced that we are actually going to close this gap.

The Corporations Amendment (Short Selling) Bill 2008 includes a number of key measures: firstly, a legislative ban—and Senator Abetz is not listening—on naked short selling and a comprehensive disclosure regime for permitted covered short selling, including placing a positive obligation on brokers to inquire of their client whether a sale is a covered short sale when the client places an order. Further, we will be expanding the powers of ASIC, the regulator, to enable to it to impose regulations on transactions that are substantially similar in effect to short selling.

The government has taken the decision to place a blanket ban on naked short selling. We are taking this action to make a stronger system even stronger. Naked short selling is currently banned under temporary actions taken by ASIC and the ASX—both of which strongly support this legislative ban.