Oct. 1 (Bloomberg) -- U.S. regulators are likely to extend a ban on short-sales of financial stocks and is considering new protections for all publicly traded companies, NYSE Euronext Chief Executive Officer Duncan Niederauer said.

Under U.S. Securities and Exchange Commission rules, the ban can be extended through Oct. 19. Investors are barred until Oct. 3 from betting on price declines for almost 980 stocks ranging from Citigroup Inc. to companies that get a fraction of their revenue from financial activities such as AutoNation Inc.

``We are fairly confident that it will be extended for a short period of time,'' Niederauer said in a conference call with companies that was broadcast on the NYSE Web site. ``I think the SEC is fully aware that the ban we have for a select number of stocks is not a long-term solution.''

The temporary ban took effect Sept. 19 as the SEC tried to settle markets and give Congress time to shore up the industry. Senate leaders are rounding up votes for Treasury Secretary Henry Paulson's $700 billion rescue package, after the House rejected it Sept. 29. A Senate vote is planned tonight.

SEC spokesman John Nester declined to comment on the agency's plans.

A Bloomberg index that tracks shares protected from short selling has gained 2.9 percent during the ban, compared with a drop of 3.8 percent for the Standard & Poor's 500 Index. The ban has also reduced trading, which has contributed to wider price swings in stocks during the day, Niederauer said.

SEC Measures

Short sellers try to profit by betting stock prices will fall. In a short sale, traders borrow shares from their broker that they then sell. If the price drops, they buy back the stock, return it to their broker and pocket the difference.

Over the past month, the SEC has passed a series of measures to restrict speculators who drove down shares of financial companies. Niederauer's comments as well as remarks by his counterpart at Nasdaq OMX Group Inc. suggest the SEC may restrict short sales even more, potentially applying thresholds triggered by a sharp decline in stocks.

The SEC may consider rules to bar traders from shorting stocks if the price declines by a specific percentage, a proposal backed by Nasdaq Chief Executive Officer Robert Greifeld. ``We strongly come down on the fact that we would like to have some type of circuit-breaker,'' Greifeld said in a Sept. 24 interview.

The SEC might also draft rules to stop trading when stocks drop below a certain threshold, or reviving the so-called uptick rule, which allowed short sales only if a preceding trade boosted a company's stock price, Niederauer said.

``That's the solution we think is the easiest to do and the easiest to understand,'' Niederauer said today.

To contact the reporter on this story: Edgar Ortega in New York at ebarrales@bloomberg.net.

Last Updated: October 1, 2008 18:56 EDT