SEC rule on 'naked' short-selling now permanent

金牛银熊

By Marcy Gordon, AP Business Writer
On Monday July 27, 2009, 2:25 pm EDT
       Buzz up! 4 Print.WASHINGTON (AP) -- Federal regulators on Monday made permanent an emergency rule aimed at reducing abusive short-selling, put in at the height of last fall's market turmoil.

The Securities and Exchange Commission announced that it took the action on the rule targeting so-called "naked" short-selling, which was due to expire Friday.

Short-sellers bet against a stock. They generally borrow a company's shares, sell them, and then buy them when the stock falls and return them to the lender -- pocketing the difference in price.

"Naked" short-selling occurs when sellers don't even borrow the shares before selling them, and then look to cover positions sometime after the sale.

The SEC rule includes a requirement that brokers must promptly buy or borrow securities to deliver on a short sale.

At the same time, the SEC has been considering several new approaches to reining in rushes of regular short-selling that also can cause dramatic plunges in stock prices.

Investors and lawmakers have been clamoring for the SEC to put new brakes on trading moves they say worsened the market's downturn starting last fall. SEC Chairman Mary Schapiro has said she is making the issue a priority.

The five SEC commissioners voted in April to put forward for public comment five alternative short-selling plans. One option is restoring a Depression-era rule that prohibits short sellers from making their trades until a stock ticks at least one penny above its previous trading price. The goal of the so-called uptick rule is to prevent selling sprees that feed upon themselves -- actions that battered the stocks of banks and other companies over the last year.

Another approach would ban short-selling for the rest of the trading session in a stock that declines by 10 percent or more.

In addition to making the "naked" short-selling rule permanent, the SEC and its staff are working with major stock exchanges to make data on short-sale transactions and volumes publicly available through the exchanges' Web sites, the SEC announcement said. It will result in "a substantial increase" over the amount of information currently required, the agency said.

"Today's actions demonstrate the (SEC's) determination to address short-selling abuses while at the same time increasing public disclosure of short-selling activities that affect our markets," Schapiro said in a statement.

dividend_growth

但ES可以照样烧呀！

flying_bird

thanks. please share your thoughts on how this would affect etfs.

dara

To be honest,

NS is not fair to longs/small fish. It creates extra shares and put lots of selling pressure, and it would be a good tool for big guys to control market.

happylux

一般来讲，只有股市有下跌危险时才想起来要rule on 'naked' short-selling。这个潜台词可不怎么好。

金牛银熊

一般来讲，只有股市有下跌危险时才想起来要rule on 'naked' short-selling。这个潜台词可不怎么好。
happylux 发表于 2009-7-27 15:34

Diver

看来高处不胜寒，政府心虚啊。政府把股市推高到脱离基本面的境地，希望虚火长盛不衰。这可以清楚地看出政府的态度了。

这样大家都只能做多赚钱了，大家都继续添火，政府就可以放心地把股市当提款机了。

如果再不济，政府还有一招，就是规定跌停板为-10％，甚至-1％，不设涨停板，或者规定涨停板为90％甚至100％。股市创历史新高峰很快就会实现了。