Friday, September 12, 2008

SEC: No permanent short selling rules

WASHINGTON -- The Securities and Exchange Commission is not expected to make permanent restrictions on short selling that it temporarily instituted earlier this summer, a move that will please traders on Wall Street but could disappoint financial firms whose stocks are being hit by short selling.

In July, the SEC said it would restrict certain types of abusive short selling in 19 financial companies, including Fannie Mae, Freddie Mac and Lehman Brothers. At the time, the agency said it would consider extending the order to the rest of the market.

Instead, the SEC intends to make other, less sweeping changes aimed at curtailing abusive short-selling.

The recommendation, which comes from the SEC's staff, still requires the approval of Chairman Christopher Cox and the four other commissioners. Mr. Cox could seek to propose extending the terms of the emergency order to the full market, although going against the staff would be unusual.

No comments: