US banks have asked the SEC to reinstate a short sale ban on financial stocks as the volatility on Wall Street showed no signs of letting up Friday, reports Reuters. The American Bankers Association requested that the SEC monitor the situation and, “as appropriate, reinstate the emergency order or issue a temporary interim rule banning short selling in financial stocks,” said an ABA executive on Friday. The ABA represents banks of all sizes. The SEC, Nasdaq and the New York Stock Exchange are considering the idea of a temporary ban on short selling a particular stock if the stock falls by more than a certain percentage. A draft proposal has been circulated, said a source briefed on the matter, but details are still in flux and nothing has been formally submitted to the SEC.

This entry was posted by Gwen Robinson on Monday, October 13th, 2008 at 5:20 and is filed under Capital markets. Tagged with sec. Edit this entry.