MADRID (AP) — Spain's financial regulator has extended for three months a ban on short selling of stocks that aims to decrease volatility in markets.
The CNMV regulator says in a statement Thursday that "due to the existence of exceptional circumstances" it is going "to impose, effective immediately and for a period of 3 months, restrictions on short selling and similar transactions."
It first adopted the ban in July.
In a short sale, investors sell stock they do not own, betting that they can buy it back at a lower price. The investor seeks a profit by betting that the price of certain shares will fall.
Short selling of shares has been blamed for worsening market volatility during the financial crisis. Italy also banned short selling in July.
Copyright 2012 The Associated Press. All rights reserved. This material may not be published, broadcast, rewritten or redistributed.