The practical problem is wanting to eliminate "all" shorting is that it plays into the hands of those who defend naked shorting and manipulation by hedge funds and MM's. They point to that type of argument and say that there is no problem in our current system and that it is only that longs are unhappy that stocks go down.
I'm not saying I necessarily disagree with you but what I would like to see and feel is possible is for there to be an elimination of manipulation via naked shorting. That is probably broad enough to result in elimination of all but regular shorting, with shares designated and discovered and the elimination of fails to deliver.
I'd like to see a total revamp of the role of MM's. For this discussion, require that any naked shorting by MM's be limited as to defined parameters based on duration, size and price swings. I.e., they can't just short under the guise of making an orderly market and then keep that position open for more than perhaps hours, rather than days, weeks and months.
Register, regulate and investigate the role of hedge funds.
Eliminate the epidemic of fails to deliver.
Prohibit the advance sale of shares by vulture funders, holders of toxic funding and discount PIPE's. This would require disclosure of terms and intent to sell by all who participate, including management, touts, loansharks, hedge funds and MM's.
All these would require very little change, in current law and each problem is a form of manipulative behavior prohibited by the securities acts and regulations thereunder. It would require a change in enforcement and clearer regulations.
If you could do all this, you would eliminate almost all of the excesses and manipulation done in the name of shorting, as well as other avenues that set up us retail investors as piggy banks for moneyed manipulators.
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