March 23, 2009 / 10:27 AM / 11 years ago

Regulators seek global approach to short selling

LONDON, March 23 (Reuters) - Regulators launched a public consultation on Monday to forge a global approach to regulating naked short selling, a practice critics have blamed for exacerbating slides in bank shares.

The International Organisation of Securities Commissions (IOSCO) recommended four principles for regulating naked short selling, whereby a dealer sells shares in a company without borrowing them first.

IOSCO said short selling helped create a “more efficient price discovery” in markets but there are concerns that in some extreme market conditions some types of short selling may contribute to “disorderly markets”. (Reporting by Huw Jones)

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