SEC Extending Short-Selling Rules

The Securities and Exchange Commission announced it will be extend the temporary rules it put in place to restrict short selling of certain financial stocks. The temporary rules were set to expire July 29, according to The Wall Street Journal.

The SEC has extended the order on the 19 financial firms until August 12, but says it will not issue another extention beyond then. The shares of the 19 financial firms targeted by the SEC have increased dramatically, with the exception of Merrill Lynch, Fannie Mae, and Lehman Brothers Holdings, which have fallen again.

SEC Chairman Christopher Cox said to the WSJ, “[The emergency order] helped to control illegitimate rumor-mongering and other techniques of market manipulation.”

The SEC may propose rules in the near future that would extend restrictions to all stocks that trade in the U.S. Following the announcement of the August 12 extension, the agency stated that they plan to proceed with planning and rulemaking that would extend to the “broader market,” according to the WSJ.