ASIC would clearly like to curb short selling practices
This will be difficult for some short-targeted companies to hear. The potential to unfairly damage corporate reputations versus the positive role some short sellers play in keeping corporations honest is a divisive issue. These include short reports being published outside stock exchange trading periods, asking the short report’s authors to tone down the provocative language, free the reports of bias and have them contain verifiable information.It also proposes that best practice would involve the shorts issuing their reports to the target company for fact-checking before publication.
But ASIC’s suggestion that conflicts of interest should be disclosed definitely has merit - in the same way as analyst broking reports contain disclosures and the corporate media are expected to reveal if they are writing about companies in which they hold shares., but ASIC’s best piece of advice to listed companies is to self-protect.
Companies with complex services - some tech companies clearly fall into this category - are also vulnerable because investors cannot adequately assess where the truth sits.