Commission Extends Temporary Orders

The SEC announced that it was extending several of the emergency provisions ordered in response to the market crisis. The temporary prohibition of short selling in financial companies will now expire on the later of either 1) the third business day after enactment of the anticipated bailout legislation or 2) October 17, 2008.

The temporary requirement that institutional money managers report their new short sales will also be extended to October 17, 2008. The SEC stated, however, that the order will likely continue in effect beyond that date without interruption in the form of an interim final rule. The same is true of the naked short selling order with its closeout provisions and broker conduct requirements.

Other measures extended to October 17, 2008, include the issuer repurchase order relaxing Rule 10b-18, the short sale antifraud rule, Rule 10b-21, and the repeal of exception for options market makers from the short selling close-out provisions in Regulation SHO.