View more on these topics

Short selling restrictions show little global impact, says Aima research

There is no strong evidence that the emergency short selling restrictions imposed in various markets around the world have changed the behaviour of stock returns, according to joint research published today.

The International Securities Lending Association, the Alternative Investment Management Association and the London Investment Banking Association jointly commissioned independent research to examine daily returns on UK, US, Italian, French and German shares before and after the introduction of the short selling restrictions, including shares subject to and unaffected by the ban.

Findings highlighted no strong evidence that restrictions on short selling changed the behaviour of stock returns. Stocks subject to the restrictions behaved very similarly both to how they behaved before their imposition and to how stocks not subject to the restrictions behaved.

The authors also found no sign of any detrimental impact of the constraints in terms of reduced efficiency of pricing.

Regression analysis suggested that changes in stock returns were driven mainly by other factors affecting the financial sector as a whole rather than the restrictions on short selling.

On the basis of this research, the associations see no case for continued bans on short selling as there is no strong evidence that these have been effective in reducing share price volatility or limiting share price falls.


Disclosure needs demarcation

Aifa has called for the regulator to rewrite the current disclosure regime to prevent tied advisers from passing themselves off as independent.

Magical Unicorn

Smaller company funds in general have fared worse than UK equity funds over the past five years or so. However, the top performing smaller company funds, where real skill is required, have performed much better than the top performers in the UK equity sector.

End the bonus culture at banks

Sesame wants the FSA to create a level playing field by taking away bonus structures for bank staff who sell products, alongside moving advisers away from commission.

Three stocks due a Brexit boost

By Mark Martin & Holly Cassell, Neptune Mark Martin and Holly Cassell highlight three high-conviction holdings in the Neptune UK Mid Cap Fund that they believe are well positioned to benefit from Brexit. Read more Important information Investment risks Neptune funds may have a high historic volatility rating and past performance is not a guide […]


News and expert analysis straight to your inbox

Sign up


    Leave a comment