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Securities rules eased to help airlines, insurers

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WASHINGTON (AP) — The government eased securities regulations Friday to allow the airline and insurance industries, hit hard by the terrorist attacks, to raise capital more quickly by selling stock.

The Securities and Exchange Commission also extended for a third week, in part, its suspension of the usual restrictions on companies buying back shares of their own stock to help shore up the market — which rebounded a bit this week from the huge losses that followed the attacks.

"The president and Congress have made clear their desire to foster the continued vitality of the nation's airline and insurance industries," the SEC said in a news release.

The relaxed capital-raising rules for the two industries will be in effect through the end of the year.

The new measures include allowing affected airlines and insurance companies to use "short-form" registration with the SEC for selling stock to the public. The agency's Division of Corporation Finance is being directed to process qualified filings within five business days of receiving them.

Congress hurriedly approved last week and President Bush signed a $15 billion bailout for the airlines industry.

This week the last of the nation's six major airlines, Delta, announced mass job cuts in the aftermath of the Sept. 11 attacks on the World Trade Center and the Pentagon. Overall, U.S. airlines plan to trim more than 93,000 jobs and aircraft maker Boeing Co. up to 30,000 more by the end of next year.

Insurance companies, meanwhile, could end up paying an estimated $30 billion to $40 billion for the attacks, the biggest insured loss ever.

Legislation being drafted by the Bush administration and lawmakers from both parties would make the government the "insurer of last resort" for businesses that suffer future terrorist attacks.

Two weeks ago, the SEC used its emergency powers for the first time to suspend for five trading sessions the usual restrictions on corporations' purchases of their shares. The move was intended to smooth trading for the reopening of the market on Sept. 17 after a four-day shutdown caused by the assaults on the World Trade Center and the Pentagon.

Existing SEC rules restrict corporations from buying or selling more than a specific daily volume of their own shares and from trading at the market's opening or closing.

Regulators later extended the waiver of restrictions on corporate buybacks for this past week's trading, in response to concerns expressed by the securities industry.

SEC Chairman Harvey Pitt told Congress on Wednesday that a surge of companies buying back their own shares had helped bolster the shaken stock market.

Pitt provided no specifics, but said there had been "a decided upsurge" of such corporate stock purchases, which "had a very positive effect on people's attitude toward the market."