AFM prolongs short-selling ban after all
NETHERLANDS - The Dutch financial regulator AFM has made a surprise and extended its measures on short-selling, despite its earlier proposal to lift them.
The supervisory body has revealed it thought it appropriate to postpone its original plan under current exceptional market circumstances.
The extension of the rule, prohibiting any person from effecting a short sale in financial stocks, comes after shares of two Dutch insurers ING and Aegon suffered from heavy speculation again.
The supervisory body held a consultation among market participants last on the short-selling ban which was renewed in January.
Although many parties agreed with AFM's plan to end the rule, several others asked for the measures to be extended, referring to current market turmoil.
IPE learnt last week the AFM would have encountered no opposition had it ended the short-selling ban and Eumedion, Dutch lobby organisation for institutional investors, last month recommended European authorities cease existing rules on short selling, arguing their effectiveness was uncertain.
The AFM says the short-selling ban will cease to have effect as soon as market circumstances allow it, though the ban will be lifted before 1 June 2009.
The regulator has this time stated it will not consult market participants but will take the policy of other European authorities into consideration before taking any decisions.
The UK's Financial Services Authority lifted its ban on short-selling in January.
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