SEC Loosens Short Sale Restrictions

Sep 23 2008 | 11:29am ET

The Securities and Exchange Commission has announced further changes to its new short-selling restrictions, just three days after they were promulgated.

The changes include a new two-week delay in making public hedge funds’ short positions. Hedge funds and other money managers still have to report their positions to the regulator the first Monday following the trade.

Meanwhile, the chief U.S.  lobbying group for hedge funds is pushing to make that two-week delay permanent.

The Managed Funds Association, in a Sunday letter to the SEC, says the new short-selling rules unfairly pin the blame for the financial crisis on hedge funds. It asked the agency to require only private disclosure of short positions by hedge funds. Wall Street’s woes are the result of “poor lending, risk management and disclosure decisions, made historically by many financial institutions, and not from short-selling activities,” MFA President Richard Baker, a former Republican congressman, said in the letter.

The SEC also loosened what had been an outright, if temporary, ban on shorting the stocks of 799 financial firms, exempting market makers in certain situations to allow them  “to continue to provide liquidity to the markets.” Still, the regulator warned that shorting for profit was still forbidden, and that market makers are still not allowed to short for a customer if it would give them a net short position in a security.

The MFA also asked the SEC to allow hedging, a concession the agency made in revising the rules.

The SEC also delegated authority over the no-shorting list to stock exchanges. NYSE Euronext and the Nasdaq OmX Group quickly added a total of 137 companies to the list.


In Depth

Fitch Says Alternative Asset Managers 'Stable' Despite Dry Powder

Nov 20 2014 | 9:30am ET

Ratings agency Fitch says the outlook for seven publicly traded alternative asset...

Lifestyle

Cohen Buys $101 Million Sculpture

Nov 12 2014 | 9:17am ET

Steven Cohen was the sole bidder for a rare Alberto Giacometti sculpture at Sotheby...

Guest Contributor

Why The Big Money Is Going To Europe

Nov 14 2014 | 6:03am ET

Peer-to-peer lending was invented with the individual investor in mind. But despite...

 

Sponsored Content

    For Hedge Funds, Mastering Data Is Key To Success

    Nov 4 2014 | 9:45am ET

    Data management is important to every business, but for hedge funds, it is critical. FINalternatives recently asked Peter Sanchez, CEO of Northern Trust Hedge Fund Services, how fund managers can deal with the demands of managing data while at the same time remain transparent and abide by operational best practices. Read more…

Editor's Note

    Guidelines for Guest Articles

    Oct 22 2014 | 9:46am ET

    We are always looking for guest articles from hedge fund managers and buy-side firms.

    If you are interested in submitting a contributed piece for possible publication on FINalternatives, please take a look at the specs. Read more…

 

Futures Magazine

November 2014 Cover

Building a better market

Reg NMS created a huge bifurcation in equity markets and while much of what has followed has been positive, in terms of lower fees and greater liquidity, many traders would like to see the market come...

The Alpha Pages

TAP July/August 2014 Cover

The Alpha Pages Interview: Senator Rand Paul

Senator Paul sat down in the debut series of the Alpha Pages Interview to discuss the broken tax code, regulation surrounding Bitcoin, and his plans for the 2016 Presidential election.