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

Journal of Investment Management; Third Quarter, 2013

Posted: 15 Nov 2014

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: September 30, 2013

Abstract

Short-sale bans have been utilized globally as a regulatory tool during periods of financial crisis. This paper reviews the observed intended and unintended effects of short-sale bans. Research has documented pervasive effects spanning many financial markets that include options, convertible bonds, credit default swaps, and exchange-traded funds. 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: G00

Suggested Citation

Hendershott, Terrence J. and Namvar, Ethan and Phillips, Blake, The Intended and Collateral Effects of Short-Sale Bans as a Regulatory Tool (September 30, 2013). Journal of Investment Management; Third Quarter, 2013. Available at SSRN: https://ssrn.com/abstract=2333796

Terrence J. Hendershott (Contact Author)

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

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

Ethan Namvar

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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