NY Securities Financing Forum: Academic presentation - What is the impact of short selling disclosure regulations on investor behavior?

Academic presentation: What is the impact of short selling disclosure regulations on investor behavior?

A trio of professors from the University of North Carolina and Columbia University have been using Data Explorers data to conduct research into how share prices react to publicly disclosed short positions.  Professor Adam Reed delivered brand new insight brought about by his team's research.

Together with Professor Charles Jones of Columbia University, and Professor William Waller, also of UNC, Professor Read was challenged to uncover the true impact of public short selling disclosures. Their research is based on the UK disclosure regime and we are pleased that Adam has chosen to present his findings for the first time at our Forum.

The market impact study is particularly pertinent ahead of crucial legislation being considered by the European Union and now up for consultation by the SEC. An impartial study on this topic should serve the industry well especially if it shows adverse consequences from naming and shaming short sellers.

Ahead of his discussion, Professor Read polled the audience and uncovered some interesting responses:

• Forty-five percent of the audience agreed that there IS evidence of predatory trading among short sellers, with 34% saying there is NOT evidence, and 21% saying they’re unsure.
• A resounding 94% of the audience agreed that there IS evidence of “follow the leader” behavior amongst investors.

The professors’ research addresses these same questions. A summary of their findings will be posted shortly at www.dataexplorers.com/newyork, along with a video interview between Professor Adam Reed and Will Duff Gordon of Data Explorers.