Naked Short-Sales, OTC Derivatives Face EU Limits
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Naked short-sales of shares and government bonds would be limited and some over-the-counter derivatives trades forced through clearinghouses under European Commission proposals to safeguard financial markets.
Frequent traders of some OTC derivatives in Europe will have to use central clearinghouses to close sales, while naked short-sellers would be required to submit proof they can access the underlying security to settle a trade designed to profit from falling prices, under two separate initiatives announced in Brussels today.