SEC halts short selling of financial stocks
19 September 2008
The SEC took temporary emergency action to prohibit short selling in financial companies. It will apply to the securities of 799 financial companies. The action is immediately effective.
The SEC took temporary emergency action to prohibit short selling in financial companies to protect the integrity and quality of the securities market and strengthen investor confidence. The U.K. FSA took similar action yesterday.
The Commission’s action will apply to the securities of 799 financial companies. The action is immediately effective.
Today’s decisive SEC action calls a time-out to aggressive short selling in financial institution stocks, because of the essential link between their stock price and confidence in the institution. The Commission will continue to consider measures to address short selling concerns in other publicly traded companies.
The Commission also has taken the following steps to address the recent market conditions:
- Temporarily requiring that institutional money managers report their new short sales of certain publicly traded securities. These money managers are already required to report their long positions in these securities.
- Temporarily easing restrictions on the ability of securities issuers to re-purchase their securities. This change will give issuers more flexibility to buy back their securities, and help restore liquidity during this period of unusual and extraordinary market volatility.
Press release
© SEC
