Regulators on the Continent and in the rest of the world moved yesterday to tighten or underscore short-selling rules in the wake of the restrictions imposed in London and New York.

The global crackdown came after the British and American regulators announced emergency action to curb speculation in financial sector stocks, with officials elsewhere keen to to calm the markets.

As regulatory sentiment spread, watchdogs lined up to deliver warnings for investors tempted to flout rules on naked short-selling.

A few introduced bans. In a move designed to bring Dublin into line with London, the Irish Financial Regulator announced a ban on the short-selling of stocks on Irish publicly quoted banks, including Allied Irish Banks, Bank of Ireland, Anglo Irish Bank and Irish Life & Permanent.

“These measures will be kept under continuous review,” it said. “These provisions are necessary to ensure the orderly conduct of the market at this time.”

Davy Research analysts said: “Any measures that will calm volatility and reassure both investors and depositors are to be welcomed and should be positive for share prices.”

Elsewhere, regulators emphasised that short-selling regulations existed and would be enforced. In Switzerland, which, along with Dublin, is a potential rival location for hedge funds, the Federal Bank Commission and SWX Swiss Exchange issued statements to say that naked short-selling was not allowed under Swiss rules and would be punished.

“The non-deliverability of the securities is an indication that the applicable rules of conduct have been breached,” SWX said. “In such instances, SWX will initiate an investigation and take the necessary measures, which can extend to the suspension or termination of participation in SWX.”

The exchange added that the “spreading of rumours of a nature that violates the applicable rules of conduct is also forbidden”.

The French Financial Markets Authority (AMF) also had a stern warning for investors who contravened its rule that trades on the Paris stock exchange had to be cleared within three days. It promised to be vigilant and “extremely severe” in enforcing the regulations.

The AMF said that it was acting in concert with other eurozone regulators over short-selling rules, suggesting that further restrictions may be on the way in Europe.

A source close to the College of Euronext Regulators, which covers France, Portugal, Belgium and the Netherlands, said that it was considering a short-selling ban. BaFin, the German stock market watchdog, was more cautious, saying that it permitted short-selling under present regulations. It declined to say whether it was considering a temporary restriction.

The Australian Securities & Investments Commission said that it would stop naked short-selling until further notice. Under Australian rules, such transactions can involve only stocks that are on an approved list. All stocks are to be removed from that list.

In a separate move, the commission also announced new rules on the reporting of covered short sales. Nick Sherry, the Corporate Law Minister, said: “The Government will be introducing legislation to strengthen disclosure of covered short-selling into the Parliament very shortly.”

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