Alerts

SEC Amends Emergency Order Banning Short Sales of Financial Firm Securities

September 23, 2008

Effective 12:01 a.m., on Sept. 22, the Securities and Exchange Commission (“SEC” or “the Commission”) amended the Emergency Order (the “Amended Order”) that it issued on Sept. 18, prohibiting short selling in the publicly traded securities of certain identified financial firms in four principal respects: (1) permitting national securities exchanges to add additional financial firms to the list of firms whose securities are subject to the ban and to delete firms from the list upon their request; (2) permitting short sales as a result of the automatic exercise or assignment of equity options or futures contracts held prior to the Sept. 19 effective date of the original Emergency Order and permitting short sales resulting from assignment of call options, including those written after Sept. 19; (3) extending the market maker exception from the short-sale ban, for the duration of the Order, and setting forth the conditions under which short sales effected as part of bona fide market-making and related hedging activity with respect to derivatives, exchange traded funds (“ETFs”) and exchange traded notes (“ETNs”) are exempt from the ban; and (4) expressly exempting short sales of Rule 144 securities from the ban. The Order, as amended, terminates on Oct. 2, 2008, subject to further extension by the SEC.