Netherlands lifts short-selling ban

28th May 2009, Comments 0 comments

The ban on the short selling of financial companies’ share will be lifted on 1 June.

The Hague – The Netherlands' securities regulator said Wednesday it would lift a ban next week on the short selling of financial companies' shares, eight months after it was first imposed.

"The prohibition on short selling will expire on 1 June," the Authority for Financial Markets said in a statement – stressing that short selling was important for the proper functioning of financial markets.

"The AFM believes that the prohibition should not last longer than absolutely necessary."

The regulator said it would introduce a temporary, cautionary measure whereby all "short positions" in Dutch financial institutions would have to be reported to the AFM.

The Netherlands was one of several countries to prohibit short selling to boost financial market stability amid the global economic crisis.

Short selling occurs when investors sell shares they do not yet own to profit later from an anticipated fall in prices – often contributing to the price fall.

AFP / Expatica

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