Bloomberg
Posted: 4:38 am
July 19, 2008
The US Securities and Exchange Commission exempted market makers in stocks from the emergency rule aimed at preventing manipulation in shares of Fannie Mae, Freddie Mac and 17 Wall Street firms.
The SEC granted relief, for the equity and option traders responsible for pairing off orders, from a rule that bars the use of abusive tactics when betting on a drop in share prices.
Exchange officials said restrictions would inhibit the flow of transactions and might raise costs for investors.
"Today's amendments, which were contemplated in Tuesday's order, provide all of the new investor protections against naked short sales while assuring continuing liquidity and best execution in our markets," SEC spokesman John Nester said in a statement.
The rule takes effect July 21.
