These decisions will not be without effect on the markets

Exceptional event, exceptional measures. To stop the haemorrhage of financial values, financial regulators have decided to block short sellers give titles that they are not in the hope of lower back. And because, they are responsible for the bankruptcy of Lehman Brothers and redemptions precipitated HBOS and Merrill Lynch. A turn, they made the decision to prohibit the selling, "short selling" in English, on the financial values. Bank bond prices have risen and the burst of vitality took advantage to stock indexes.

It began Thursday evening. The British regulator, the Financial Services Authority (FSA) has banned short selling on financial values, with immediate effect and until 16 January 30. The Securities and Exchange Commission (SEC) had adopted the same measures during the summer for values a month twenty: 800 values are involved this time, at least to October 2.

"hedge funds", brokerage firms and institutional investors are now asked to reveal their paris. The direct sale of the shares is not the only one to bear the costs; financial ETF integrate the list. Options, not yet; the SEC expects to see the effects of the first steps. The other regulators followed suit: in Switzerland, Australia, the Canada and the European Union in coordination with the Committee, the CESR.

Puzzle for intermediaries

In France, as a first step, Friday morning, the authority of des marchés financiers (AMF) recalled the rule in force: a vendor on the regulated market has three days to deliver the titles he has borrowed. This informative press release has been followed in a second night... more binding: the Constable of the stock exchange strengthens its control measures on the financial technique and for a minimum period of three months. In the crosshairs, naked short selling.

With the crisis, investors took more time to borrow securities for sale in the market as required by regulation. Many have played on the time that offered them the delivery of securities borrowed (three days), selling then by buying. Under these conditions, they have are not embarrassed of borrow them previously. The AMF therefore decided that "any provider of investment services receiving a sale order on one of the values concerned must require, on the part of its payer, the filing in his books, prior to the execution of the order, called securities to be sold." A puzzle for intermediaries.

Lenders must also ensure that the vendor seeks only to cover a position already taken. Some, CalPERS in head, decided not to participate in this practice on values. These measures will particularly hamper the work of the 'hedge funds' managers and traders of the rooms of the markets of these same banks which complain about the sellers of their securities. The President of the Chicago Board Options Exchanges took their defence and that of the market, Friday: "It is difficult to understand the benefits of a drastic measure that will lead to a sudden and severe loss of liquidity of a market at the time when the Government is taking unprecedented measures to preserve." These decisions will not be without effect on the markets.