Ban on ‘naked short selling’ worries firms

“The [SEC] emergency order will further constrain normal market operations," said the Managed Funds Assoc. president.
JUL 31, 2008
By  Bloomberg
The Managed Funds Association and the Coalition of Private Investment Companies, both of Washington, yesterday expressed concern about the Securities and Exchange Commission's extension of a ban on “naked short selling.” “We are deeply concerned that the extension of the emergency order will further constrain normal market operations, extract beneficial liquidity from the markets and create inefficiencies that will distort shareholder value,” MFA president Richard Baker said in a statement. A July 15 order by the SEC was extended this week through Aug. 12. The order was extended for a second 10-day period to cover naked short selling in the securities of financial institutions for which the Federal Reserve Board has granted temporary access to its discount window, the SEC said in a statement issued late Tuesday. The order was extended for a second 10-day period and won’t be further extended, the SEC said. After the extended order expires, the SEC will immediately consider the creation of a rule that would be effective after public comments were filed. “The order is designed to protect legitimate short selling in these securities but helps prevent illegitimate naked short selling and potential 'distort and short' manipulation,” SEC Chairman Christopher Cox said in the statement. Naked short selling is selling short without borrowing the stock to be sold, and failing to deliver it.

Latest News

Carson, Lido strengthen RIA networks with bicoastal deals
Carson, Lido strengthen RIA networks with bicoastal deals

Carson is expanding one of its relationships in Florida while Lido Advisors adds an $870 million practice in Silicon Valley.

Goldman gets shareholder backing on $80M executive bonus packages
Goldman gets shareholder backing on $80M executive bonus packages

The approval of the pay proposal, which handsomely compensates its CEO and president, bolsters claims that big payouts are a must in the war to retain leadership.

Integrated Partners, Kestra welcome multigenerational advisor teams
Integrated Partners, Kestra welcome multigenerational advisor teams

Integrated Partners is adding a husband-wife tandem to its network in Missouri as Kestra onboards a father-son advisor duo from UBS.

Trump not planning to fire Powell, market tension eases
Trump not planning to fire Powell, market tension eases

Futures indicate stocks will build on Tuesday's rally.

From stocks and economy to their own finances, consumers are getting gloomier
From stocks and economy to their own finances, consumers are getting gloomier

Cost of living still tops concerns about negative impacts on personal finances

SPONSORED Compliance in real time: Technology's expanding role in RIA oversight

RIAs face rising regulatory pressure in 2025. Forward-looking firms are responding with embedded technology, not more paperwork.

SPONSORED Advisory firms confront crossroads amid historic wealth transfer

As inheritances are set to reshape client portfolios and next-gen heirs demand digital-first experiences, firms are retooling their wealth tech stacks and succession models in real time.