ASIC has announced it would keep the ban on covered short selling of financial securities in place until 31 May 2009 but will keep this position under review.

Covered short selling of financial securities will continue to be banned.

Covered short selling of non-financial securities remains unaffected and will still be permitted.

The daily reporting of gross short sales will continue as will the publication to the market of aggregate short sales the day after trading.

ASIC will continue to requires strict compliance with the ban on naked short selling as outlined in RG196.

In his speech to the 2009 ASIC Summer School, Impact of the Global Financial Crisis on the Corporations and Financial Services Regime, the Minister for Superannuation & Corporate Law described the actions and reforms the government is making in response to the crisis including:

• review of ratings agencies
• short selling reform
• national system to regulate all consumer credit
• APRA guidelines for executive remuneration

ASIC has released a consultation paper on the regulation of internet discussion sites (IDS) that have commentary about financial products.

Consultation Paper 104 Internet discussion sites (CP 104) will help guide ASIC’s review of Regulatory Guide 162 Internet discussion sites (RG 162).

This consultation paper:

• sets out ASIC’s position on the legal issues surrounding internet discussion sites and how it proposes to review its policy, and
• seeks the views of internet discussion site operators and users.

Under the current law, the activities of IDS operators and users may constitute the provision of financial services, for which an Australian Financial Services licence (AFSL) is required. ASIC proposes to update its policy to give specific guidance on which IDSs are likely to need an AFSL. ASIC does not propose to grant IDS operators relief from the financial services licensing and disclosure regimes, meaning operators will need to hold an AFSL unless a pre-existing exemption applies to them. ASIC also proposes to give guidance on the conduct requirements applying to IDS operators, whether or not they hold a licence. The consultation paper proposes that all IDS operators should, at a minimum:

• maintain the IDS in a fair and efficient manner;
• have good record-keeping practices; and
• give appropriate warnings to users of their site.

Submissions close on 27 April 2009.