The U.S. Securities and Exchange Commission Monday proposed a new way to restrict short selling, which it says may be easier to implement than its previous proposal.
The SEC is seeking public comment on an alternative uptick rule that would allow short selling only at an increment above the national best bid.
In April, it proposed two possible approaches to restricting short selling: imposing restrictions based on either the last sale price or the national best bid, or adopting a “circuit-breaker,” that would apply only to a particular security during severe declines in the price of that security.
The SEC says the alternative uptick rule would be easier to monitor because it would not require monitoring of the sequence of bids (whether the current national best bid is above or below the previous national best bid). “It also may be possible to implement this approach more quickly and with less cost than the prior proposals,” it says.
“Today’s request for additional comment is consistent with the very deliberative process of determining what is in the best interest of investors,” said SEC chairman, Mary Schapiro. “We want to ensure that everyone has a full opportunity to provide their comments on this alternative uptick rule before the commission reaches any conclusions.”
The initial comment period for the April proposals ended on June 19, the commission is now reopening the comment period for 30 days in order to receive input on this alternative.
IE
SEC proposes new approach to restricting short selling
Regulator seeks comment on alternative uptick rule
- By: James Langton
- August 17, 2009 August 17, 2009
- 15:30