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Monday, September 22, 2008

SEC Adds Firms to Short-Sale Ban, Tweaks Rules

FOXBusiness

The Securities and Exchange Commission revised its order banning short sales on certain financial companies through Oct. 2, adding some extra stocks to the list and allowing the securities exchanges themselves to add companies that meet certain criteria, in addition to making some technical changes.

The SEC published a list of 30 companies it was adding to the list, which had originally included 799 firms. As soon as the list was published, some companies left off the list, such as General Electric (GE) and CIT Group (CIT), reportedly started lobbying to be included.

Both those firms got their wish, along with others such as American Express (AXP), Discover Financial Services (DFS) and General Motors (GM).

In addition, the SEC gave securities exchanges the authority to add stocks to the short-sale ban list themselves, as long as the companies fit in certain categories, including banks, insurance companies and registered brokers or dealers.

In a press release, the Commission stated, “Difficulties with the classification criteria led to the omission of financial institutions falling within these categories,” and it asked each exchange to publish a list of securities that it would include in the ban.

The SEC also made some technical changes to the short-sale ban, tweaking rules related to market makers and options contracts, among other things.