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The Securities and Exchange Commission, in conjunction with the U.K. Financial Services Authority, Friday took temporary emergency action to prohibit short selling in financial companies "to protect the integrity and quality of the securities market and strengthen investor confidence."

In an emergency order, the SEC said its action will apply to the securities of 799 financial companies. The move is effective immediately.

The ban on the short-selling of financial companies will end on Oct. 2, the SEC said, but could be extended.

"The commission is committed to using every weapon in its arsenal to combat market manipulation that threatens investors and capital markets. The emergency order temporarily banning short selling of financial stocks will restore equilibrium to markets," said SEC Chairman Christopher Cox in a statement. "This action, which would not be necessary in a well-functioning market, is temporary in nature and part of the comprehensive set of steps being taken by the

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Federal Reserve

, the Treasury, and the Congress."

The U.K.'s Financial Services Authority on Thursday banned short-selling in financial stocks until January.