The US Securities and Exchange Commission has made permanent a rule intended to reduce the potential for abusive “naked” short selling in the securities markets, the US regulator said on Monday July 27.
The new Rule 204 requires broker-dealers to promptly purchase or borrow securities to deliver on a short sale. It makes permanent an emergency rule, approved by the SEC in the autumn of 2008 and due to expire on July 31.
“Today’s actions demonstrate the Commission’s determination to address short selling abuses while at the same time increasing public disclosure of short selling activities that affect our markets,” said Mary Schapiro, SEC...