Hedge Funds

. . . and contemplates tightening rules on naked shorts


This week the SEC also took an interest in the rules regarding the "naked" short selling of stock, voting to open a public comment period to help the agency decide if and/or how best to alter its regulations on shorting.

The SEC has said it is considering whether to eliminate a "grandfather" clause that allows investors to maintain naked short positions for an extended period of time.

Shorting is the legal practice of betting that a stock will decline in value and is accomplished by selling borrowed stock in the hopes of buying that stock back in the