The SEC today announced that it is seeking additional public comment on an alternative proposed uptick rule that would allow short selling “only at an increment above the national best bid,” according to a commission news release.
On April 8, the Securities and Exchange Commission proposed two approaches to limiting short selling. One of the previous proposals would have reinstated an uptick rule the agency repealed in July 2007. That rule required a stock's last trade to represent an increase in price before it could be sold short. Another proposal would have restricted shorting a stock at a price lower than the last best bid price. In addition, the SEC proposed three variations on circuit-breaker rules that would halt short selling of a particular stock once its price declined more than 10% over a set period.
The SEC said the alternative proposed rule would be easier to monitor than the ones it proposed in April. “Because the alternative uptick rule would reference only the current national best bid in determining permissible short sales, it would not require monitoring of the sequence of bids or last sale prices,” the SEC said, in an announcement on its website.
The comment period for the SEC's initial round of uptick rule proposals ended June 19. The public will have 30 days to comment on the new proposal after it is published in the Federal Register, the SEC news release said.
