Dutch financials up on first day after short ban

* Dutch ban on short selling ends

* Shares in financials broadly higher

* Aegon lead blue chip gainer

AMSTERDAM, June 1 (Reuters) - Shares in Dutch financial companies largely rose on Monday, the first day they could be sold short since last October, when the local market regulator introduced a ban on the activity.

Shares in bancassurer ING Group NV (ING.AS) rose 3 percent to 7.64 euros, while insurance company Aegon NV (AEGN.AS) rose 3.4 percent to 4.54 euros.

Banking concern BinckBank (BINCK.AS) shares were up 1.5 percent at 9.22 euros, and bancassurer SNS Reaal (SR.AS) was up 4 percent at 3.95 euros.

In a short sale, traders sell borrowed shares on the expectation they will fall in value, allowing them to buy them back at a lower price to settle the loan and pocket the difference as profit.

The practice was blamed last year for putting extra pressure on financial shares during the market crisis, prompting regulators to step in.

But those rules are now beginning to expire, as market authorities acknowledge that short sales are a regular part of normal market operations.

The Dutch Authority for Financial Markets, or AFM, said last Wednesday it would lift the ban but require dealers to register their short positions in financial companies in some cases. [ID:nLR071040]

In the U.S., financial stocks underperformed markets for the entire duration of a short-selling ban there, and their effectiveness in general has been called into question.

Several countries introduced a ban last September, and many have extended them, including Germany and Italy last week. [ID:nLT678762] (Reporting by Ben Berkowitz, editing by Will Waterman)