Tsang ordered stock brokers to report all short-selling trades to market regulators and ensure short sellers had stock on hand to cover their positions, with stiff penalties for non-compliance.
The U.S. Securities and Exchange Commission has been studying the issue of naked short-selling and even instituted new regulations in January 2005 that require the stock exchanges to report stocks that routinely fail-to-deliver.
The U.S. and Asian stock markets sputtered in the wake of the Philly Fed report, while European stock markets tried to stabilize following recent selling pressure related to the EU debt crisis in their own back yard.