Short selling is an investment strategy in the financial market, the purpose of which is to make a profit with the help of the market by selling a certain asset (such as a foreign exchange or commodity, etc.). Recently, however, there has been a controversy over short-selling, raising questions about its legality and compliance. So, is short-selling legal and compliant? Why is there another crackdown on it?
First of all, we need to be clear that the act of shorting itself is not illegal. In many countries and regions, short selling is allowed and plays a role in the market. However, in some cases, short-selling can trigger market risk, leading to increased market volatility and even systemic risk. Therefore, regulators need to regulate and restrict short-selling behavior to ensure the stability and healthy development of the market.
So, why is there a crackdown on short-selling? This is mainly due to the malicious manipulation of the market by some criminals who use the short-selling mechanism. These behaviors include: using the short-selling mechanism to sell in large quantities**, creating false trades, publishing false information, etc., to influence the market** and profit from it. These behaviors not only harm the interests of other investors, but also seriously disrupt the normal order of the market. Therefore, regulators need to crack down on these practices to maintain fairness and justice in the market.
For the legality and compliance of short selling, we need to analyze it on a case-by-case basis. Under normal circumstances, shorting is a legitimate investment strategy, but it may be considered illegal if the shorting mechanism is used in the context of malicious market manipulation. Therefore, investors need to comply with relevant laws, regulations and regulatory provisions when conducting short selling operations to ensure that their actions are legal and compliant. At the same time, regulators also need to strengthen market supervision and crack down on illegal acts to maintain market fairness and order.
In summary, the act of shorting itself is not illegal, but the use of shorting mechanisms in the context of malicious market manipulation may be considered illegal. Therefore, we need to strengthen the supervision of the market and crack down on illegal activities to maintain the fairness and order of the market. At the same time, investors also need to comply with relevant laws, regulations and regulatory provisions to ensure that their actions are legal and compliant.