WFE Press Statement on IOSCO Short Selling Report, 11 May 2009

The World Federation of Exchanges (WFE) submitted its response to a March 2009 Consultation Report on the regulation of short selling issued by a task force of the Technical Committee of the International Organization of Securities Commissions (IOSCO). 

In its response, the WFE concurs with IOSCO that prohibitions against abusive short selling should be rigorously enforced, but that legitimate short selling plays an important role in the market in terms of providing more efficient price discovery, mitigating market bubbles, increasing market liquidity, facilitating hedging and other risk management activities. Further, WFE believes that to restore investor confidence it is important that regulators and governments are involved in dispelling myths about short selling and re-affirming the importance of short selling to the efficient and effective operations of markets.

Report Date: 
Mon, 05/11/2009