SEC Study Finds Pre-Borrow Rule For Naked Short Sales Effective, but Costly

On May 1, 2009, the Securities and Exchange Commission’s Office of Economic Analysis (OEA) published a summary of a study indicating that a pre-borrow requirement on naked short selling effectively curbs abuses, but also has the unintended effect of significantly increasing the costs of legitimate transactions.  We provide a detailed synopsis of the OEA’s summary of its study.

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