Iosco recommends changes to short selling regulations

Short selling has been blamed -- rightly or wrongly -- for how rapidly share prices of financial institutions, especially in the US, deteriorated post-Lehman Brothers' collapse. The knee-jerk reaction in markets such as the US, the UK and Australia was to ban short selling. In Asia, Taiwan and Korea followed suit. Markets such as Hong Kong, Japan, and Thailand didn't change the rules. The impact of short selling and the response from regulators has led to some soul searching about ho…