German regulator signals no wider short sale ban
German regulator Bafin on Friday signaled it was not ready to broaden a existing ban on naked short selling to include all forms of short sales on Friday.
"We are montoring the situation closely but see no irregularities in the market at present," a spokeswoman for the German regulator said on Friday.
Short-selling is the process through which an investor borrows shares and sells them on the expectation their price will fall and they can be bought back at a lower price.
In a naked short sale, the investor has not even borrowed the share, but still bets on a drop in share price.
[Source: Reuters, Frankfurt, 12Aug11]
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