Umfang:
1 Online-Ressource (6 p)
Inhalt:
Short selling constitutes a significant portion of total sales of exchange traded securities in the United States. Articles in the Securities Regulation Law Journal have outlined the recommendations of the House Committee on Government Operations in its report titled "Short-Selling Activity in the Stock Market: Market Effects and the Need for Regulation (Part 1)". In this brief article, I argue that two issues have been inadequately addressed by the House Committee. First, the House Committee assumes that short selling is undertaken by investors seeking to profit from a decline in stock prices. Based on this assumption, the House Committee recommends increased disclosure obligations with respect to short selling. However, what is missing from the House Committee Report is an analysis of the economic literature on short selling. Much of this literature demonstrates that short selling is undertaken for a number of reasons and that short selling undertaken for the purposes of speculation constitutes only a portion of total short selling. Second, the House Committee endorses the uptick rule applicable to short selling and recommends the uptick rule be extended to apply to NASDAQ trading. Again, the House Committee does not acknowledge the existence of economic literature which challenges the assumptions underlying the uptick rule
Sprache:
Englisch
