Given the current state of the world’s financial markets (crisis, meltdown, apocalypse, whatever you want to call it), it’s fairly surprising it's taken governments and financial authorities so long to get their act together on short selling. The SEC had a good stab at it, when it strove to cut out naked short selling in July, but why did it single out certain financial stock? Why didn't it go the whole hog at the time and embrace all sectors?
And then last Tuesday UK chancellor Alistair Darling revealed something of the FSA’s stance on shorting. Speaking on BBC Radio 4’s Today program, he declared the FSA had not only identified the problem of hedge funds shorting, but that it was looking at the problem with a view to taking action.
Mysteriously, however, a member of the FSA’s market policy team denied any new measures to counter shorting was being addressed in the UK market. He claimed the only policy under review was the disclosure rules introduced in June to target investors in companies undergoing rights issues, which was reportedly being reviewed by Darling himself.
All things considered, it's pretty amazing the FSA and the SEC took so long to take the matter seriously enough, when the total ban on short selling suddenly slipped into first the UK and then the US markets at the end of last week.