AUSTRALIA: ASIC amends class order to provide further hedging relief to Australia market makers

Tuesday May 3 2011

ASIC has announced it has made a minor amendment to ASIC Class Order [CO 09/774], “Naked short selling relief for Australia market makers” which will allow licensed Australia market makers to short sell securities in the S&P/ASX300 index, in order to hedge risk. Previously, this was only allowed for securities that appeared in the S&P/ASX200 index. While section 1020B of the Corporations Act 2001 prohibits naked short selling, licensed Australia market makers have been afforded relief to enable them to mitigate the risks involved in their Australia market making activities. The remaining conditions in [CO 09/774] remain unchanged. The amended class order commenced on 19 April 2011.

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