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Stop short selling, who has the powers to inforce this?
As you no, I think it was France where they wanted to stop short selling on there exchange, so my question is what body can inforce this and if its that easy why didnt USA stop short selling on the DOW etc ... esp as they lost over 1000 points (DOW)?
Thanks
Can you help answer these questions from other members on NexusFi?
Essentially it would be the SEC in the US that would enforce it. Brokerage firms which are regulated by the SEC can prevent short selling by clients quite easily. The SEC could essentially shut down firms that violate the requirements. Now whether they would or should do so is a different question.
Personally it seems a silly idea to think stopping short selling will have the effect they hope for. You start putting on these types of restrictions and money will simply flow elsewhere and find other ways to achieve the intended results.
Banning short selling for any period longer than a few weeks would be long term financial market suicide. The housing market got to be so big a bubble and blew so hard BECAUSE there was no short selling. Had there been a market to short the prices of housing in the US, the bubble would have been controlled by speculators recognizing the prices were too high and shorting it all the way up. Once you ban short selling, all the selling will happen at once when everybody panics - read global meltdown...
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