Iosco, the world group of securities regulators, has steered a middle course between clamping down on short selling and recognising its value, in a consultation paper published on Monday March 23.The paper, on which comments are invited by May 4, says short selling should be subject to controls, but regulators should make exceptions for some types of transactions, to keep markets working smoothly.In November the International Organization of Securities Commissions’ technical committee set up a task force on short selling, led by Martin Wheatley, chief executive of the Hong Kong Securities and Futures Commission.At that time regulators in developed markets across the world were scrambling to protect financial institutions and other companies from what they feared was a sustained attack by short sellers, which risked driving firms into bankruptcy. Temporary short selling bans and tighter...