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J.P. Morgan is a marketing name for Worldwide  Securities Services businesses of JPMorgan Chase & Co. and its subsidiaries worldwide. ©2008 JPMorgan Chase & Co. All rights reserved.  To fi nd out more log on to www.jpmorgan.com.au/wss, or contact:  Sydney  David Edwards at David.X.Edwards@jpmorgan.com  VV  www.jpmorgan.com.au/wss  sales, then all shorts.  “We believe we avoided  similar disruption on our market  by placing the ban on when  we did,” D’Aloisio concluded.  The new shorti ng  rules  Alternatives managers say  the new reporting requirements  of short sales should  follow global practice, in which  investors, or their custodian or  prime brokers, report shorting  interest, to the regulator or the  exchange. 

Short interest is measured  by the total number of shares  in a company that have been  sold short, and is reported as  a percentage of outstanding  shares in a company.  ASIC now requires  short-sellers and the brokers  they trade through to report  shorting transactions on a daily  basis, so the ASX can release a  report that shows these trades,  in aggregate, one hour before  trading starts on each working  day. Unsettled trades are not  reported. 

Kim Ivey, chair of the Australian  chapter of the Alternative  Investment Management  Association, said capturing  daily trade data would not  provide the amount of short  interest in a listed company,  or the rate at which that short  interest is changing.  He said that reporting daily  trade data would “significantly  distort” the actual shorting  activity of a stock because it  failed to show the size of the  position and its implied impact  on the price of the stock.  ASIC’s focus on daily  information is understandable,  but fortnightly reporting of the  short interest in a stock, which  is practiced in the US, would  serve the market well, Steele  said. 

He said there is rarely any  significant change in the short  interest of a stock from one  fortnight to the next.  When publicised, short interest  positions can inform the  investment and risk management  decisions made by managers.  For example, securities  with a lot of short interest are  susceptible to a short squeeze  if new, positive information  about that security hits the  market.