May 5, 2011
Short selling is important to market liquidity.
However, evidence of unencumbered access to the asset must be proven for every transaction.
Short selling without such access is illegal market manipulation and short be punished by removal of market access rights.
I do not believe that margin requirements provide any security against such manipulation.
While your study is a US affair, US markets affect other markets particularly in terms of price discovery, their key function.
Thus please take account of my views as a UK investor in American securities.