Germany is to ban so-called "naked short-selling" at its 10 most important financial institutions.
Short-sellers usually borrow shares, sell them, then buy them back when the stock falls and return them to the lender keeping the difference in price.
"Naked" short-selling occurs when a trader sells a financial instrument he has not yet borrowed.
The German ban will run from 19 May to 31 March 2011, also applying to naked credit default swaps.
Credit default swaps are financial derivatives that provide insurance for losses if a borrower goes bankrupt, and have become a lucrative trading market.
European leaders have complained that speculators used credit default swaps on Greek government debt to bet the country would default on its borrowings.
That raised pressure on the country to the point where it was forced to ask for a bail-out.
The EU had already suggested some form of regulation of naked short selling, before Germany made its move.
Analyst Michael Malpede at Easy Forex in Chicago said: "It tends to suggest desperation on the part of the German officials who want to discourage what they consider speculative attacks on euro zone financial markets."
The German finance ministry did not specify the names of the 10 institutions covered by the ban on naked short-selling.
After the German announcement the euro extended losses against the dollar to hit a fresh four-year low below $1.22.