Aug. 12 (Bloomberg) -- The U.S. Securities and Exchange Commission's emergency ban on short sales in shares of financial stocks, which expires today, has failed to raise the share prices any higher than they were the day Bear Stearns Cos. collapsed.

The U.S. regulator's order banned so-called naked short- selling of Fannie Mae, Freddie Mac and 17 investment banks, whose collapse might expose the U.S. government to losses.

The CHART OF THE DAY shows the market value of the 19 SEC- protected companies soaring 26 percent, or $270 billion, since the July 15 announcement. Still, that gain only returned the banks to their valuation on Monday, March 17, the day of JPMorgan Chase & Co.'s buyout of Bear Stearns, which was facing bankruptcy after billions of subprime-mortgage linked losses.

``The fundamentals that had created the panic selling have improved, though the sharpness of the rally was helped by the rules,'' said Antony Gifford, who oversees about $4 billion in North American equities at Henderson Global Investors in London. ``The lifting of the ban won't make much difference because new rules on short sales are expected any time.''

The SEC is considering forcing investors to disclose bets on falling stocks and may take additional steps to rein in rapid-fire short sales, Chairman Christopher Cox said on July 24.

In traditional short selling, traders borrow shares and sell them. If the price drops, they profit by buying back the stock, repaying the loan and pocketing the difference. Naked short sellers trade without borrowing shares.

The 17 brokerages in the temporary SEC order were: BNP Paribas Securities Corp., Bank of America Corp., Barclays Plc, Citigroup Inc., Credit Suisse Group AG, Daiwa Securities Group Inc., Deutsche Bank AG, Allianz SE, Goldman Sachs Group Inc., Royal Bank of Scotland, HSBC Holdings Plc, JPMorgan Chase & Co., Lehman Brothers Holdings Inc., Merrill Lynch & Co., Mizuho Financial Group Inc., Morgan Stanley and UBS AG.

To contact the reporter on this story: Elisa Martinuzzi in Milan at emartinuzzi@bloomberg.net

Last Updated: August 12, 2008 09:19 EDT