It doesn't even start to be enforced till next Monday, but and only for 17 financial stocks right now for 30 days...but there is talk about extending it to all securites if they can find a way to get around their "problems"...naked shorts beware IMO they'll try their darndest to get the whole market covered...now if they would only do the same on futures market..esp. oil, the dollar and grains...watch them tumble overnight...

Article 1

Cox said "naked" short-selling isn't illegal, contrary to what some market experts say, so the SEC imposed an emergency rule that prohibts naked selling in the stocks of 19 major financial institutions.

Although there are "operational reasons" why the SEC can't eliminate this procedure throughout the entire market, it hopes to put an end to as much of it as possible, Cox said.

It's important to understand that the SEC is only trying to eliminate illegal naked short-selling and not regular short-selling, Cox added.

Article 2.

An emergency order issued yesterday by the SEC aims to curb the short selling of stocks in the financial services sector, including Fannie Mae and Freddie Mac, as well as 17 other firms. The plan takes effect on Monday July 21 and remains in place for 30 days. However, the SEC is considering whether to extend it to all U.S. traded stocks.

Under the requirement, any short selling in the securities covered on the emergency list will have to be arranged for beforehand in order to borrow the securities from a share lender. So-called naked short selling involves selling a stock short without taking any action to borrow it, meaning the short seller doesn't enter into a contract to borrow those shares from a share lender. Forcing short sellers to make borrowing arrangements beforehand, it is believed, will reduce the amount of stock made available for short selling activities.

A part of the dramatic rise in short selling is due to the elimination of the so-called up-tick rule, said Muriel Siebert, founder, Muriel Siebert & Co. This barred short sellers from selling until the stock price rose. It was eliminated in 2007.

"That was a bad mistake and I hope they change that rule because investors now can just bash a company," said Sibert.

Naked short selling has been blamed for the jaw-dropping slide in stock prices of mortgage giants Fannie Mae and Freddie Mac, as well as Lehman Brothers and several other financial firms. Articles in the Wall Street Journal and other business tomes have linked the practice to the demise of Bear Stearns earlier this year.

The emergency order should stop "unlawful manipulation through 'naked' short selling," the SEC said in its release.