The Intended and Collateral Effects of Short-Sale Bans as a Regulatory Tool

The Journal of Investment Management, Third Quarter, 2013

18 Pages Posted: 10 Oct 2012 Last revised: 19 Sep 2013

See all articles by Terrence Hendershott

Terrence Hendershott

University of California, Berkeley - Haas School of Business

Ethan Namvar

University of California, Berkeley - Haas School of Business; Columbia Business School

Blake Phillips

University of Waterloo

Multiple version iconThere are 2 versions of this paper

Date Written: October 10, 2011

Abstract

Short-sale bans have been frequently utilized globally as a regulatory tool during periods of financial crisis. This paper is a review of the observed intended and unintended effects. We see that short-sale bans have pervasive effects spanning many financial markets that include options, convertible bonds, CDS, and ETFs. Such implications should be of interest to regulators and policymakers when contemplating future bans.

Keywords: short-sale ban, SEC, securities and exchange commission, short-sale constraints, financial crisis, price discovery, liquidity

JEL Classification: G12, G14, G18, G28

Suggested Citation

Hendershott, Terrence J. and Namvar, Ethan and Phillips, Blake, The Intended and Collateral Effects of Short-Sale Bans as a Regulatory Tool (October 10, 2011). The Journal of Investment Management, Third Quarter, 2013. Available at SSRN: https://ssrn.com/abstract=2159599 or http://dx.doi.org/10.2139/ssrn.2159599

Terrence J. Hendershott

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

Ethan Namvar (Contact Author)

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States
510-642-7989 (Phone)

HOME PAGE: http://haas.berkeley.edu

Columbia Business School ( email )

3022 Broadway
New York, NY 10027
United States

Blake Phillips

University of Waterloo ( email )

200 University Avenue West
Waterloo, Ontario N2L 3G1 N2L 3G1
Canada

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