Publication

“SEC Amends Emergency Orders Relating to Short Selling”

On September 21, 2008, the Securities and Exchange Commission (“SEC”) announced technical amendments to its September 18, 2008 emergency order that temporarily banned short selling in 799 financial companies. The amendments are aimed at addressing technical and logistical concerns arising from the original order. In particular, the amendments narrow the original order’s exception to short selling for market makers by prohibiting a market maker, for new positions, from selling short if it knows a customer or counterparty is increasing an economic net short position in shares of a financial firm covered by the order. The amendments also modify coverage under the original order to those financial institutions selected by the listing exchanges and allow issuers to opt out of such coverage. The SEC also announced amendments to its September 18, 2008 emergency order that temporarily required short sellers to disclose their short positions on the new Form SH. The amendments provide that Form SH filings will not be made available to the public for a two-week period.

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