On 23 September 2008, Treasury released an exposure draft on the
Australian Government's Corporations Amendment (Short
Selling) Bill 2008 (Bill) which requires the disclosure of
covered short sales transactions on Australian financial markets.
Submissions on the Bill must be made to Treasury by 21 October
The Bill, which builds on the Australian Securities and
Investments Commission (ASIC) interim reporting requirements for
covered short sales on a listed market (see ASIC CO 08/751) proposes to introduce
disclosure requirements for covered short sale transactions, which
are not currently caught by the disclosure obligations under
section 1020B(5) of the Australian Corporations Act.
The Bill proposes the insertion of two new provisions (s1020BA
and s1020BB) in the Corporations Act. The proposed provisions
require sellers of s1020B products (i.e. securities, managed
investment products, government bonds and derivatives) to advise
their executing stock broker when the sale is a covered short sale.
The broker must in turn report details relating to the information
disclosed to it, to the relevant market operator. The requirement
also applies to brokers trading on their own behalf in this case
the broker must disclose the covered short sale directly to the
relevant market operator.
The Bill will apply to sales made on a licensed market and sales
that occur through on or off market crossings. The disclosure
requirement will apply to both Australian and overseas sellers.
Regulations will specify the mechanics and particulars of the
disclosure requirements and procedures. The Government has not
indicated when draft Regulations will be released.
It will be an offence under the Bill if a seller or broker does
not disclose details of a covered short sale at the time and in the
The Bill and related materials are available here. Please let us know if you would like any
assistance in making a submission on the Bill.
The content of this article is intended to provide a general
guide to the subject matter. Specialist advice should be sought
about your specific circumstances.
To print this article, all you need is to be registered on Mondaq.com.
Click to Login as an existing user or Register so you can print this article.
This part will cover the legal position in relation to promotional materials and misleading and deceptive conduct.
Some comments from our readers… “The articles are extremely timely and highly applicable” “I often find critical information not available elsewhere” “As in-house counsel, Mondaq’s service is of great value”
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).