On 18 September 2008, amidst worsening market turmoil following the recent bankruptcy filing of Lehman
Brothers, the US government bail-out of AIG, and the impending rescue takeover of the UK?s largest mortgage
lender HBOS by Lloyds TSB, the UK?s Financial Services Authority (FSA) announced1 an emergency ban on all
short-selling in publicly quoted UK financial sector companies2 (i.e., UK banks or insurers, or their UKincorporated parent companies) in effect from midnight on 18 September 2008.
Whilst still regarding short-selling as ?a legitimate investment technique in normal market conditions,? the FSA
has determined that the current ?extreme circumstances? necessitate the ban and a heightened disclosure
obligation in order to forestall any further instability and loss of confidence in the financial sector.
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