MFA appreciates the careful, deliberative process the SEC undertook in considering these difficult market issues.  While MFA shares the SEC’s commitment to restoring investor confidence, we are disappointed that the short selling restrictions adopted today are not supported by empirical data.  In particular, most market observers agree that price declines and decreased investor confidence during the financial crisis were caused by the sudden and drastic changes in economic fundamentals, including the perceived insolvency of certain companies, and not by any short selling activity.  Click here to read the complete response.

The report finds that the public short sale disclosure regime in effect in the United Kingdom has caused: (i) bid-ask spreads for UK stocks subject to disclosure to widen by over 45%, (ii) total trading volume in affected UK stocks – including long trades – to decrease by 13%, and (iii) short selling liquidity to be impaired by approximately 20%. Together, these effects limit the ability of businesses to raise capital and create jobs, and raise costs for pension funds, retail funds, and other investors. Click here to read MFA's news release about the report.  Click here to read a description of the report.