Thursday, September 18, 2008

SEC Plans Temporary Short Selling Ban

(Calculated Risk) From the WSJ: SEC Plans to Temporarily Ban Short-Selling

The Securities and Exchange Commission took its most aggressive assault against bearish stock bets by stating its intention to issue a temporary ban on short-selling.

SEC Chairman Christopher Cox briefed Congress late Thursday ... It's unclear if the SEC's intention has been approved by the commissioners ... which stocks are covered or for how long it will be in effect.
This follows the FSA in the UK banning short selling of financial stocks: FSA halts short-selling of financial stocks
Traders will be banned from betting against financial companies on the London Stock Exchange by selling shares short, the country’s financial regulator said today.
...
The FSA said the new rule would take effect at midnight and remain in force until January 16, 2009. It added the ban would be reviewed after 30 days and could be extended to other sectors “if (the FSA) judges it to be necessary.”
This focus on short sellers is misguided and counterproductive.

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