WASHINGTON (Reuters) – The head of the U.S. Securities and Exchange Commission said on Monday that it should not ban short-selling of shares, amid speculation on further measures the agency might take to arrest a market rout that stems from fears the coronavirus will spark a global recession.
FILE PHOTO: Jay Clayton, Chairman of the U.S. Securities and Exchange Commission, speaks at the Economic Club of New York luncheon in New York City, New York, U.S.,September 9, 2019. REUTERS/Shannon Stapleton
The statement, by SEC Chairman Jay Clayton, comes after other countries, including Spain, Italy and South Korea, have moved to curtail short-sellers, who borrow shares and then sell them, betting their price will fall before the short-sellers buy back the shares and return them, pocketing the difference.
“You need to be able to be on the short side of the market in order to facilitate ordinary market trading,” Clayton said in an interview on CNBC on Monday, adding that he understands…
