EU May Limit Naked Shorts of Stocks, Government Debt

[dipsydoodle]

Source: Bloomberg

The European Union may limit so- called naked short sales of shares and government debt, which it says can cause a “disorderly market and possible systemic risks.”

Traders would be required to submit proof that they have access to the underlying security to settle a trade designed to profit from a decline in prices, according to a European Commission document obtained by Bloomberg News.

The proposals, which must be approved by the full commission before being submitted to the Parliament and national governments, require short sellers to show they “can ensure that the security can be borrowed so that settlement can be effected,” the document said.

German Chancellor Angela Merkel, who banned some naked short selling in Germany in May, called on the commission earlier this year to speed up curbs on financial speculation. Merkel and French President Nicolas Sarkozy argued that some bets against stocks and government bonds should be banned as the Greek debt crisis made markets more volatile.

Read more: http://www.bloomberg.com/news/2010-09-02/european-union-plans-to-limit-naked-short-sales-of-stocks-government-debt.html

[Uncle Joe]

1. Kicked and recommended.

Thanks for the thread, dipsydoodle.

[GETPLANING]

2. Naked shorting is fraud,

It is the same as counterfeiting, and should be prosecuted as such.

[snot]

3. K&R'd

[harun]

4. Good. U.S. should do the same. We should also make it illegal to borrow

money to purchase stocks.

[Evasporque]

5. GOP looking to limit booty shorts...nt