Abstract
Most of the financial regulators around the world such as ASIC, FSMA, CSRC, AMF, FFSA, FCA, SEC reacted to the 2007-09 turmoil and 2011 Greek debt crisis by imposing short sales restrictions. These series of events held and elevated at different dates and in different nations based on various sets of stocks featuring degree of severity. This paper examined several findings of research on shorting bans and its impacts to the security market in different aspects such as stock price and its behavior during ban, price discovery and the liquidity. It is also found that during the ban, activity related to shorting dropped by 77% and smallest stocks that was related to the ban underwent severely in market quality based on spreads, intraday volatility and price impacts. Those stocks, which are listed, did not provide any price impact but during the whole banning period it was underperforming constantly. Evidences portrays that the shorting ban did not generate any simulated improve in prices.
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