MFA Statement on U.S. Securities and Exchange Commission Proposed Rule On Short Sale Disclosure

WASHINGTON, D.C. – Managed Funds Association President and CEO Bryan Corbett today issued the following statement in response to the U.S. Securities and Exchange Commission’s proposed rule on short sale disclosure:

“American financial markets are the envy of the world, so it’s bewildering that the SEC chose to borrow from elements of Europe’s failed short selling policy. The objective of increasing investor transparency is better achieved through other mechanisms. This rule, as proposed, provides no additional protection to investors or markets.

“Hedge funds and other alternative investors are in favor of aggregate public disclosure of short interest by issuer on a weekly basis. This information is already available to regulators without imposing new, costly, and onerous filings that expose managers to increased risk of retaliation from corporate fraudsters.

“Short selling is an essential component of healthy functioning capital markets. It is a commonly used investment tool that benefits markets and all investors by increasing efficiency, promoting liquidity, reducing volatility, and exposing corporate fraud and corruption. It is already highly regulated through both the SEC and CFTC, and existing frameworks provide abundant protection for the markets and all investors.”