A wave of panic rippled across US exchanges on Friday September 19 when the Securities and Exchange Commission failed to consider market makers in its new regulations on short selling.
The US regulatory body issued an emergency order on Friday prohibiting short selling the stocks of some financial companies, after the UK’s Financial Services Authority had implemented similar regulations that morning.
The order is temporary and will terminate at 11.59pm New York time on October 2. Although the SEC may extend the rule beyond this period, it is unable to do so for more than 30 calendar days because of the “emergency” nature of the order.
The order...