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| Version 1 | Version 2 |
|---|---|
| UK shares up after short-sell ban | UK shares up after short-sell ban |
| (40 minutes later) | |
| Leading UK shares rose in early Friday trading as investors appeared to welcome the City regulator's ban on short-selling in financial stocks. | Leading UK shares rose in early Friday trading as investors appeared to welcome the City regulator's ban on short-selling in financial stocks. |
| The FTSE 100 index was up as much as 215 points or 4.4% at 5,095 in early exchanges, with banking stocks among the biggest risers. HBOS was up 32%. | The FTSE 100 index was up as much as 215 points or 4.4% at 5,095 in early exchanges, with banking stocks among the biggest risers. HBOS was up 32%. |
| The gains come after the Financial Services Authority (FSA) announced its temporary move on Thursday night. | The gains come after the Financial Services Authority (FSA) announced its temporary move on Thursday night. |
| Short-selling involves traders profiting from falling share prices. | Short-selling involves traders profiting from falling share prices. |
| The technique works when investors borrow shares from another investor, and then sell them hoping the price will fall. | The technique works when investors borrow shares from another investor, and then sell them hoping the price will fall. |
| Short-selling in layman's terms | Short-selling in layman's terms |
| The aim is then to buy back the asset at a lower price and return it to its owner, pocketing the difference. | The aim is then to buy back the asset at a lower price and return it to its owner, pocketing the difference. |
| Previously anyone could short a position in a company's shares, but typically hedge funds were the main players. | Previously anyone could short a position in a company's shares, but typically hedge funds were the main players. |
| Other banking stocks that were up sharply included Lloyds TSB, up 33%, Barclays up 25%, and RBS up 24%. | Other banking stocks that were up sharply included Lloyds TSB, up 33%, Barclays up 25%, and RBS up 24%. |
| The temporary ban on short-selling applies to 29 financial stocks. | The temporary ban on short-selling applies to 29 financial stocks. |
| It was introduced by the FSA due to concerns that short-selling had been a contributory factor in the sharp falls in HBOS shares before it was rescued by Lloyds TSB. | It was introduced by the FSA due to concerns that short-selling had been a contributory factor in the sharp falls in HBOS shares before it was rescued by Lloyds TSB. |
| The ban, which came into force at midnight on Thursday, will last until 16 January but the FSA will review its operation in 30 days. | |
| "While we still regard short-selling as a legitimate investment technique in normal market conditions, the current extreme circumstances have given rise to disorderly markets," said FSA chief executive Hector Sants. | |
| The ban applies to shares in the following companies - Admiral, Alliance & Leicester, Alliance Trust, Arbuthnot, Aviva, Barclays, Bradford & Bingley, Brit Insurance, Chesnara, European Islamic Investment Bank, Friends Provident, HBOS, Highway Insurance, HSBC, Islamic Bank of Britain, Just Retirement Holdings, Legal & General, Lloyds TSB, London Scottish, Novae, Old Mutual, Prudential, Resolution, Royal Bank of Scotland Group, RSA Insurance, St James's Place, Standard Chartered, Standard Life, and Tawa. |