The New York Stock Exchange held a conference call early this afternoon to address the issue of the SEC ban on short selling.
According to the NYSE, the SEC has instituted four actions, three of which have already been amended.
1) The tightening up of Reg Sho. This is a clear attack on naket short selling. It will be tightly enforcing the T-3 rule, which means all trades must be settled in three days, which gives short sellers a very short time to cure the failure to settle.
2) Disclosure. Institutions including hedge funds will have to disclose to the government all their short positions that are not diminitive the Monday after they are placed. And these will be published two weeks after that.
3) In the SEC prohibition on shorting common stock in financial companies, the initial list was full of inconsistencies. The NYSE says it was told to expand it with
very strict requirements including any issuer of a subscriber bank, thrift, insurance company, broker/dealer or investment advisor.
According to the NYSE all these orders are due to expire either Oct. 1 or Oct. 2. The SEC can extend the emergency order with cause up to 30 days. Given the volatile nature of the markets, the NYSE expects the SEC to extend the ban for 30 days.