Traders crowd post that handles Morgan Stanley on the floor of the New York Stock Exchange near the close of trading, 17 Sept 2008

Financial regulators in the United States have introduced new rules intended to curb a trading strategy that benefits investors when stock prices fall, and that has been blamed for market turmoil.

New rules from the U.S. Securities and Exchange Commission that went into effect Thursday restrict certain types of so-called short-selling.

Short-selling occurs when a trader borrows shares in a stock from a broker to sell. If the stock price goes down, the trader buys back more shares at a cheaper price, returns the broker's portion and keeps the rest.

Regulators in Great Britain have enacted a temporary ban on short-selling.

New York state's attorney general, Andrew Cuomo, says he is launching an investigation into instances of illegal short-selling, in which traders or brokers spread false information about the deals.

Some information for this report was provided by AFP, AP, Bloomberg and Reuters.