The majority prevailed at the Securities and Exchange Commission meet as the SEC voted to curb selling stocks short when they are rapidly falling, even as some members said there was no legitimate evidence that such action is warranted.

SEC commissioners voted 3-2 today in favour of restricting short sales of a stock if it declines 10 per cent from the previous day's closing price. The moment the 10 per cent threshold is reached, traders can only execute short sales orders for the stock at a price above the market's best bid.

"Excessive downward price pressure on individual securities, accompanied by the fear of unconstrained short selling, can destabilize our markets and undermine investor confidence in our markets," said Mary L. Schapiro, Chairwoman SEC.

Companies like GE, Charles Schwab and more than 5,600 other people had signed a petition sent to the SEC wanting a short-selling to be banned, while Goldman Sachs and hedge funds Citadel Investment Group and DE Shaw fought against the ban. Short-selling is a practice of borrowing shares and selling them, with an intention to buy them back later at low prices.