France backs down on short-selling loophole

French regulators have failed in an attempt to extend the short-selling ban to major European stock markets, allowing investors to bet on further falls in financial stocks, the FT reports.

Traders are unsure whether they can roll over existing short positions on key European indices, and there is particular confusion around the status of equity index derivatives, which consist of baskets of stocks including bank shares, and are operated from countries not covered by the short-selling ban. The Autorité des Marchés Financiers (AMF), the French financial regulator, had hoped to impose a ban on traders rolling over existing short positions on indices operated by Stoxx. The push by the French was designed to prevent traders and investors using indices to circumvent the short...