Tuesday, 8 March 2011

MEPs vote for "naked" short-selling restrictions

BBC News reports that MEPs have voted in favour of restricting the practice of "naked" short selling.


Short-sellers usually borrow shares or bonds, sell them, then buy them back when the stock falls - pocketing the difference.

"Naked" short-selling is when a trader sells financial instruments he has not yet borrowed.

A new directive places conditions on the use of credit defaults swaps (CDS) - a form of government debt insurance.

Read more here: http://www.bbc.co.uk/news/business-12670943
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1 comment:

records management said...

The idea seems vaid but how could they possibly regulate this? Also, isn't the government taking a step too far in regulating the stock exchange?

19 May 2011 at 20:31

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