Stock Exchange to tackle problem of short selling
Friday 02 September 1994
This move comes amid a crisis of short-selling and arbitrage dealings between the markets in London and Paris in Euro Disney shares. The Euro Disney shortage has been exacerbated by the absence of large institutional shareholders in the company. Stock is often borrowed by dealers from institutions to close short positions.
A spokeswoman for the Exchange said the timing of the document and the Euro Disney situation were coincidental, although it did help to highlight the problem.
When it is not possible to borrow stock, the Exchange itself moves in to resolve the problem through a procedure called buying-in. This is aimed at ensuring that shares that have not been delivered by the settlement date reach buyers as soon as possible.
The action involves the Exchange asking a broker to try to buy stock by bidding up on the prevailing price. Any monetary difference has to be paid for by whoever shorted the stock.
Hundreds of buying-in orders on Euro Disney are said to have been issued in the last couple of months. The Exchange said it hoped the backlog would be cleared by the higher availability of shares after Euro Disney's recent rights issue.
- 1 Malaysia Airlines MH17 crash: Pro-Russian rebel 'admits to shooting down plane'
- 3 Israel-Gaza conflict: The myth of Hamas’s human shields
- 5 Dutch paedophile club to fight their ban at the European Court of Human Rights
Malaysia Airlines MH17 crash: Vladimir Putin is given 'one last chance' to end hostilities in Ukraine
The 'scroungers’ fight back: The welfare claimants battling to alter stereotypes
The truth about conspiracy theories is that some require considering
Malaysia Airlines MH17 crash: Ukrainian military jet was flying close to passenger plane before it was shot down, says Russian officer
Malaysia Airlines MH17 crash: Massive rise in sale of British arms to Russia
Malaysia Airlines MH17 crash: victims’ bodies bundled in black bags and loaded onto trains
iJobs Money & Business
£350 - £400 per day: Orgtel: PMO Analyst - Banking - London - £350 -£400 per d...
£300 - £350 per day + competitive: Orgtel: Cost Reporting Manager - MI Packs -...
£35000 - £40000 Per Annum plus 23 days holiday and pension scheme: Clearwater ...
£475 - £525 per day: Orgtel: Test Lead, London, Investment Banking, Technical ...