I know someone posted something about this earlier but you have to wonder why they've waited this long to consider the obvious.
SEC Said to Consider Proposing Uptick Reinstatement (Update2)
By Jesse Westbrook
March 10 (Bloomberg) -- The U.S. Securities and Exchange Commission may propose within a month that the so-called uptick rule be reinstated, as regulators aim to bolster markets roiled by the worst financial crisis since the Great Depression.
The SEC staff may advise the agency’s five commissioners to vote on the proposal at an April public meeting, according to people familiar with the matter who declined to be identified because plans haven’t been completed. The SEC will solicit public comment before deciding whether to bring back the rule, which bars investors from betting against a stock until it sells at a higher price than the preceding trade, the people said.
The SEC has faced pressure from lawmakers and companies including Charles Schwab Corp. to bring back the short-selling restriction after the Standard & Poor’s 500 Index plunged 53 percent since it was scrapped in July 2007. House Financial Services Committee Chairman Barney Frank and Senate Banking Committee Chairman Christopher Dodd today said they support reinstating the rule.
SEC spokesman John Heine declined to comment.
In a short sale, traders borrow stock and sell it, hoping to profit by replacing the shares at a lower price. The uptick rule required traders to wait for a price increase in the stock they wanted to bet against, and prevented so-called bear raids where successive short sales drive prices down.
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