NEWS

May 29 (Reuters) – A patchwork of short-selling curbs looks set to continue despite doubts over their usefulness.

They were introduced in many countries last September to ease pressure on financial shares but the selling continued in many cases.

Earlier this week Belgium and Italy extended the curbs but the Netherlands allowed them to expire. Germany extended its ban on Friday until January 2010.

Short-selling is the selling of borrowed stock in the hope of making a profit if prices fall. Naked short-selling involves selling of shares before a seller has borrowed them.

Critics say the curbs have had little impact and there is a need for better coordination among regulators, particularly in the European Union, where the same shares can be traded on platforms in several member states, irrespective of national boundaries.

The International Organisation of Securities Commissions, a forum for over 100 national market watchdogs, said in March the practice improved price discovery but naked short selling should be regulated. It will publish final recommendations later this year.

The following is the state of play in key markets:

AUSTRIA
On April 29 it extended a ban on naked short selling of financial industry stocks until June 30.

BELGIUM
Belgium said on Thursday it has extended a temporary ban on naked short sales of financial stocks until Sept. 21.

BRITAIN
Disclosure requirements are due to expire June 30. The Financial Services Authority had no comment on whether they would be extended.

FRANCE
Pending outcome of a public consultation, measures to curb short-selling of financial sector shares to continue.

GERMANY
On Friday market regulator Bafin extended its ban on short-selling of 11 financial shares until January 2010.

ITALY
Italy’s stock market regulator on Wednesday extended a ban on short selling to July 31 from May 31.

THE NETHERLANDS
The Dutch stock market regulator AFM said on Wednesday curbs on short selling would be allowed to expire on June 1.

RUSSIA
Russia, which is not part of the EU, said on Thursday it will lift its ban on short-selling of shares within days.

UNITED STATES
No curbs in force. The U.S. Securities and Exchange Commission has proposed restrictions that would apply to all stocks and a series of circuit breakers would be triggered when a stock dropped more than 10 percent. The SEC also considering a modified version of the uptick rule that would allow shorting if the last bid was higher than the previous one.
(Reporting by Huw Jones, editing by Andy Bruce and Jason Neely)
(Reuters messaging: huw.jones.reuters.com@reuters.net; + 32 2 287 6817; huw.jones@thomsonreuters.com)
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