The Securities and Exchange Commission (SEC) banned the practice of naked short selling in the United States in 2008 after the financial crisis. The ban applies to naked shorting only and not to other short-selling activities.
Prior to this ban, the SEC amended Regulation SHO to limit possibilities for naked shorting by removing loopholes that existed for some brokers and dealers in 2007. Regulation SHO requires lists to be published that track stocks with unusually high trends in failing to deliver (FTD) shares.