A Survey of Short Selling Regulations

38 Pages Posted: 23 Apr 2023 Last revised: 17 Apr 2024

See all articles by Amy K. Edwards

Amy K. Edwards

Securities and Exchange Commission (SEC)

Adam V. Reed

University of North Carolina Kenan-Flagler Business School

Pedro Saffi

University of Cambridge - Judge Business School

Date Written: April 16, 2024

Abstract

Given the complex and controversial nature of short-selling regulation, we review the academic literature and provide insights for policymakers and academics. We organize the complex history of short-selling regulation into three areas: trading restrictions, securities lending regulations, and disclosure requirements. We identify, analyze, and discuss 45 distinct regulations promulgated from 1896 to 2021, primarily by reviewing the academic literature and the data sources employed. In so doing, we provide several insights regarding the effectiveness of regulatory approaches and the wider impact of short-selling regulation on markets.

Keywords: Market efficiency, liquidity, regulation, securities lending, short selling

JEL Classification: G2, G12, G14, G15, G34

Suggested Citation

Edwards, Amy K. and Reed, Adam V. and Saffi, Pedro A. C., A Survey of Short Selling Regulations (April 16, 2024). Available at SSRN: https://ssrn.com/abstract=4417912

Amy K. Edwards

Securities and Exchange Commission (SEC) ( email )

100 F St NE
Washington, DC 20549-1105
United States
202-551-6663 (Phone)

Adam V. Reed

University of North Carolina Kenan-Flagler Business School ( email )

Kenan-Flagler Business School
Chapel Hill, NC 27599-3490
United States

Pedro A. C. Saffi (Contact Author)

University of Cambridge - Judge Business School ( email )

Trumpington Street
Cambridge, CB2 1AG
United Kingdom

HOME PAGE: http://www.pedrosaffi.com

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