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Alternative Market Briefing

German regulator BaFin temporarily bans short selling of eleven financial stocks until 31 December

Tuesday, September 23, 2008

From the Opalesque Team: The German Federal Financial Supervisory Authority (BaFin) on Friday temporarily prohibited short sales (transactions resulting in a short position) of shares of the following companies from the financial sector:

AAREAL BANK AG ALLIANZ SE AMB GENERALI HOLDING AG COMMERZBANK AG DEUTSCHE BANK AG DEUTSCHE BÖRSE AG DEUTSCHE POSTBANK AG HANNOVER RÜCKVERSICHERUNG AG HYPO REAL ESTATE HOLDING AG MLP AG MÜNCHENER RÜCKVERSICHERUNGS-GESELLSCHAFT AG

The ban will apply from 20 September 2008, 00.00 hrs., to 31 December 2008, 24.00 hrs, but will be reviewed on an ongoing basis.

BaFin justified this move by the recent developments on the global capital markets. "In the current market situation, short selling can drive financial companies into ruin", said BaFin President Jochen Sanio. He added it was imperative to act resolutely against this risk, a view that was also shared by the securities regulators of the most important markets.

The legal basis for its decision was section 4 (1) of the Securities Trading Act (Wertpapierhandelsgesetz - WpHG), BaFin stated. Based on this, the supervisory authorities had to counteract undesirable developments that might result in serious disadvantages for the financial markets. BaFin may "issue orders which are appropriate and necessary to eliminate or to prevent such undesirable developments." Corporat......................

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