Ann: Change in substantial holding , page-9

Aussie_Boy,

If I may, i would like to add my two bobs worth.

In the majority of cases, the borrowing of stock is given by a lender to a borrowere for a specified period of time.
It can be either borrowed for the purpose of covering some shorted shares, and it may even be borrowed for the purpose of increasing one's voting powers during the use of proxy votes. There have been cases that even companies themselves that have big stakes on a company and that wants to maximise their proxy votes and wants a resolution put through, they will borrow shares for that purpose alone as well.

In the case of a major shorter for instance, they usually make use of financial Insitutions, Banks and Super Funds to borrow shares in order to cover Temporarily their shortings. Under the current provisions, anyone that shorts a share has a certain period of time to either cover their shorts by buying on market, or just borrow the shares to invalidate/reverse the shorted position. Once that is done, the share will then be returned to the Lender with the previoulsy agreed fees, and it will then restart all over again.

When someone wants to make a move on a company for instance, and wants to lower the sp, that is when this will occurr. A typical example of that, was when AOE was taken over via a SOA by Shell/Petrochina last year. NAB at the time was the offending party that was lending it's share for that purpose alone, and that was constantly in and out of a substantial holder position on a regular basis. If you care to read through the fine lines at the time that the change in Substantial Holder's Notice is released, you will find therein the purpose of the changes as well.

Don't forget that is is a hell of a lot cheaper for someone that borrows shares to cover their shortings, than buying the shares back on market. At the same time, you also have to consider that while they have collected their loot from the selling of shares they didn't own, they can also invest that money in making money elsewhere. At times, that fee is way less than having to buy shares back on market while of course it may even be less than the profits they will make/generate with that money parked elsewhere.

Am I happy with all of that. NO, I am not. But obvioulsy our regulators are happy to let it continue, while some investors are getting ripped off on a regular basis.

It wouldn't surprise me one bit, that the same thing could start here as well in order to put some pressure on our sp, and stopping it going way too high for someone's likings.

Regards,
Buddy134