U.S. SEC to propose new short selling rule in weeks...
WASHINGTON - The top U.S. securities regulator plans to propose new short selling rules in the next few weeks.
U.S. Securities and Exchange Commission Chairman Christopher Cox said on Tuesday that the proposal "will focus on market-wide solutions" but is not intended to have any impact on the direction of prices.
Cox also said fails to deliver "were reduced substantially" for the stocks covered under the SEC's recent emergency short selling rule.
"It was a very effective order from that standpoint," Cox told reporters after a news conference.
The SEC enacted an emergency rule on July 21 that required short sellers to pre-borrow stock in mortgage finance giants Fannie Mae
Investors who bet on falling stock prices also have been required to deliver the securities by the settlement date -- obligations that forced Wall Street to change the way they traded those stocks.
Short trading in those 19 stocks reverted to rules governing other shares on August 13 as the SEC experiment against abusive short selling expired.
Copyright 2008 Reuters.
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