Spain has banned short-selling of shares to try to limit price moves after markets fell sharply on fears the country may need a full bailout.
The CNMV agency blocked the practice for three months to try to restore order after sharp falls in bonds and shares.
Italy has also banned short-selling of financial stocks for one week.
Short-selling is a technique used by investors who think the price of an asset, such as shares, will fall.
Investors borrow the asset from another investor and then sell it in the relevant market. The aim is to buy back the asset at a lower price and return it to its owner, making a profit along the way.
In a statement, CNMV said it was imposing the ban in order to maintain market order.
The BBC reports it is not the first time that such a curb has been imposed. Almost a year ago, France and Belgium joined Spain and Italy in a ban on short-selling financial stocks to try to stabilise bank shares which had fallen sharply.
On Friday, Valencia, one of Spain's 17 regions, asked central government for a financial lifeline, and on Sunday, the Murcia region said it was considering following suit.
Shares in Europe fell when trading began on Monday. The euro fell to a two-year low against the US dollar at one point on Monday and to its lowest level the Japanese yen, since November 2000, before recovering slightly.