British regulators have temporarily banned short selling in three Portuguese stocks, amid political and market turmoil in that country.
The UK’s Financial Conduct Authority (FCA) announced Thursday that it is temporarily restricting short selling in Banco Comercial Português SA, Banco Espírito Santo SA, and Sonae Indústria SGPS SA, in all UK trading venues, following a similar move by regulators in Portugal.
The FCA says that its short selling ban will assist the Portuguese authorities, the Comissao do Mercado de Valores Mobiliarios (CMVM), which issued a temporary prohibition of short selling in shares of these companies (and one other, which doesn’t trade in the UK), in an effort to address recent volatility in these stocks.
The companies all saw their shares drop more than 10% in one day, and the CMVM says it’s concerned about “downward speculation phenomena”. This came after a couple of cabinet ministers resigned sparking fears that the government may collapse.