The rapidly evolving regulation of short sales needs to be
monitored carefully by participants in the financial markets.
On September 17 and 18, 2008, (with amendments on September 21
and October 1, 2008) the U.S. Securities and Exchange Commission
(SEC) took a number of emergency actions relating to short selling,
both specifically of the stocks of financial institutions and with
respect to short selling practices generally. Those actions and
answers to certain questions concerning them are outlined
below.
The Prohibition on Selling Short U.S. Financial Stocks
Between the close of the U.S. stock markets on Thursday,
September 18, 2008, and the opening of the markets on Friday,
September 19, 2008, the SEC imposed a flat prohibition, subject to
very limited exceptions, on the short sale of the stocks of 799
companies in the bank, savings association, broker-dealer,
investment advisory and insurance industries, whether domestic or
foreign, and the owners of any of
