Spain Extends Short-Selling Ban On Bank Shares

Spain's financial regulator said Wednesday it will continue to ban short-selling in financial-services stocks until market conditions improve, extending restrictions on trading strategies that pay off if stocks tumble as part of an effort to contain volatility.

The ban applies to local banking stocks, and also includes shares of sector-related companies such as stock exchange operator Bolsas y Mercados Espanoles SA (BME.MC), local insurers Mapfre SA (MAP.MC) and Grupo Catalana de Occidente SA (GCO.MC), and Madrid-based brokerage Renta 4 Servicios de Inversion SA (R4.MC).

The CNMV, as the market supervisor is also known, said the ban was extended due to "continued market instability." Restrictions will be lifted when market conditions improve.

Italy, Belgium and France also instituted similar bans, which went into effect on Aug. 12. The CNMV said at that time that "extreme market volatility" was affecting financial-services stocks, banning all short positions for 15 days as of Aug. 12. It then extended the ban for one month.

-By Santiago Perez, Dow Jones Newswires; (34) 91 395 8119; santiago.perez@dowjones.com

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