The U.S. Securities and Exchange Commission announced that it is extending its ban on short selling financial stocks, which was set to expire on Oct. 3, for another two weeks.
The SEC says that its efforts to minimize the possibility of abusive short selling are intended to be in effect while the U.S. Congress works on a plan to stabilize credit markets and the financial system. The Senate passed a revised version of that plan on Wednesday night. The bill must now also be approved by the House of Representatives, which rejected a different version of the plan earlier this week.
In the meantime, the SEC announced that each of the emergency orders issued on Sept. 17 and Sept. 18, will be extended to 11:59 p.m. ET on Oct. 17, “to allow time for completion of work on the anticipated passage of legislation.” This includes a ban on short selling financial companies, added disclosure requirements for institutional money managers, and an easing of restrictions on the ability of securities issuers to repurchase their securities.
The Canadian Securities Administrators and regulators in other jurisdictions have adopted similar bans of their own, it remains to be seen if they follow the SEC in extending their prohibitions too.
SEC extends ban on short selling
It remains to be seen whether the CSA or other jurisdictions follow suit
- By: James Langton
- October 2, 2008 October 2, 2008
- 07:58