SEC rule on 'naked' short-selling now permanent
SEC makes emergency rule targeting 'naked' short-selling permanent
* On Monday July 27, 2009, 2:07 pm EDT
WASHINGTON (AP) -- Federal regulators are making 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 Monday 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.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) -- Federal regulators are making 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 Monday 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 the sale.
The SEC rule includes a requirement that brokers must promptly buy or borrow securities to deliver on a short sale.
SEC makes emergency rule targeting 'naked' short-selling permanent
* On Monday July 27, 2009, 2:07 pm EDT
WASHINGTON (AP) -- Federal regulators are making 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 Monday 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.
THIS IS A BREAKING NEWS UPDATE. Check back soon for further information. AP's earlier story is below.
WASHINGTON (AP) -- Federal regulators are making 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 Monday 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 the sale.
The SEC rule includes a requirement that brokers must promptly buy or borrow securities to deliver on a short sale.
