Wednesday, August 19, 2009

Update: SEC Proposes Alternative Uptick Rule for Comments

On August 17, 2009, the SEC reopened the comment period on the proposed uptick rule intended to curtail short selling. As previously reported on April 9, 2009, the original proposal offered two approaches, one imposing a market-wide and permanent restriction on short selling based on either the last sale price or the national best bid, and the other a "circuit breaker" which would limit sales of a particular security during severe price declines. The SEC is now seeking comments on an alternative uptick rule that would allow short selling only at an increment above the national best bid. The SEC believes such alternative uptick rule may be "more effective" and "easier to implement" than the earlier proposed approaches as it would eliminate the need to monitor previous national best bid or sale sequences.

The comment period for the April proposal ended on June 19, 2009, but will now be extended for an additional 30 days after publication of an associated SEC note in the Federal Register.

SEC Press Release

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