I refer to real – or so-called “naked” – short selling. So-called “covered” short selling is an altogether both simpler and more complex matter.
“Covered” short selling goes to the sort of volatility and transparency and possible malpractice issues that have battered a range of stocks over the past six months or so. It also goes to the fiduciary duties and practices of fund managers and trustees.
But there is no inherent reason to ban “covered” selling. And indeed the Corporations Act does not.
It arguably isn’t even short selling. More a contractual matter between the seller and the person from whom the seller has borrowed the stock. But with significant and reasonable disclosure issues for the ASX as the market.