FCA temporarily bans short selling

The FCA has temporarily restricted short selling of shares in two Portugese banks and a Portugese manufacturer of engineered wood products amid concerns about recent trading activity.

Short selling of Banco Comercial Portugues, Banco Espirito Santo and Sonae Industria is banned until 11:59pm tonight (4 July 2013).

The FCA decided to wield its power following action taken by the Portugese regulator, Comissao do Mercado de Valores Mobiliarios.

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The new watchdog was able to issue the ban after predecessor the Financial Services Authority was given the power back in September 2008.

Short-selling sees traders bet on share prices falling.

The FSA clamped down on the practice that some think contributed to the sharp falls in HBoS shares before Lloyds TSB had to step in to rescue it.