Why, then, was short-selling being held culprit in the first place Perhaps its the nature of short-selling which causes a problem of perception. Short-selling basically involves the sale of a borrowed stock, which the person who sold it buys only after the actual sale. So, if the price of a stock falls after its sale, the seller makes money by buying it at a cheaper rate. It is thus easy for people to perceive the intent of short-sellers to drive the market down. This perception, however, requires players to be able to manipulate the market at will, which is difficult in some of the deeper and better regulated markets in the West. Even in India, we have come a along way from the days in which the likes of Harshad Mehta and even Ketan Parekh could manipulate markets. The Indian stock market is deeper and better regulated than ever before and there is no evidence of manipulation in this crashremember panic is not deliberate intent. Short-selling performs a very important role in the market. It provides quick liquidity. And it is a very important tool of corporate governanceshort sellers have the ability to keep managements and thus corporate performance, which ultimately determine the fundamentals of stock prices, on their toes. Indian regulators have been ahead of the curve. For this, they deserve much praise.