Increased hedge fund short selling fuels global stock-lending business

Stock lending

In July 2008, when the US Securities and Exchange Commission (SEC) cracked down on what it saw as possible stock-market manipulation, it issued rules to make it harder to short financial stocks. The rules protected 19 financial companies, including Fannie Mae and Freddie Mac as well as investment banks like Lehman Brothers, from shorting.

The SEC's reaction mirrored similar concerns by the UK Financial Services Authority (FSA) over shorting of financial stocks. As this most popular of hedge fund