
SEC mulls new short-selling rules
Daily news headlines
WASHINGTON, DC - The US Securities and Exchange Commission (SEC) has extended its consultation period for creating new short-selling rules, with the regulator pushing the idea of allowing short sellers to buy only at a price above the current market bid price.
The system, which is one of two under consideration, is known either as the 'alternative uptick rule' or the 'upbid rule'. It closely resembles the former uptick rule dating from Depression-era regulation, abolished in 2007.
The SEC has asked for further comments on the idea, which it says "may be more effective and easier to implement than previously proposed price test restrictions currently under consideration".
The regulator is delaying for at least one month any regulatory action on the shorting issue, reopening the consultation period, which ended on June 19, with a new comment period running for another 30 days.
"Today's request for additional comment is consistent with the deliberative process of determining what is in the best interest of investors," says SEC chairman Mary Schapiro. "We want to ensure everyone has a full opportunity to provide their comments on this alternative uptick rule before the Commission reaches any conclusions."
In April the SEC proposed two approaches to restrict short selling, in response to international accusations that it had affected financial stability by decimating bank share prices.
One suggested approach was to apply rules on a permanent and market-wide basis, restricting shorting based on either the last sale price or the national best bid.
The other approach would act as a 'circuit-breaker' and apply only to specific securities during crisis periods to prevent prices plummeting. Once triggered, the breaker would halt or restrict shorting based on either the last sale price or the national best bid.
The SEC says the proposed alternative uptick rule would allow short selling only at an increment above the national best bid, and has reopened consultation specifically for the evaluation of that option.
You can comment online via the SEC release, which can be read here.
Only users who have a paid subscription or are part of a corporate subscription are able to print or copy content.
To access these options, along with all other subscription benefits, please contact info@risk.net or view our subscription options here: http://subscriptions.risk.net/subscribe
You are currently unable to print this content. Please contact info@risk.net to find out more.
You are currently unable to copy this content. Please contact info@risk.net to find out more.
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Printing this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
Copyright Infopro Digital Limited. All rights reserved.
You may share this content using our article tools. Copying this content is for the sole use of the Authorised User (named subscriber), as outlined in our terms and conditions - https://www.infopro-insight.com/terms-conditions/insight-subscriptions/
If you would like to purchase additional rights please email info@risk.net
More on Regulation
Industry confused by EU’s ‘bingo card’ clearing rules
Uncertainty over definition of representative trades in Emir active account requirement
FDIC scrutinised over move to cover all SVB deposits
Advisory panel questions whether guaranteeing uninsured deposits was necessary to prevent contagion
EBA seeks to tighten up uneven prudent value adjustments
Regulator to consult ‘soon’ on changes to improve consistency of capital deductions
Post-Brexit divergence puts EU subsidiaries on the rack
Banks face choice between higher staffing costs or over-engineered processes at UK headquarters
SEC criticised for belt-and-braces ban on volume-based pricing
Legal experts question need for rules to prevent firms disguising agency trades as proprietary
SEC expected to protect CRT in conflicts of interest rule
Decision could come as early as today; high hopes for credit risk transfer exemption
FRTB managers face hard facts about risk factors
There are ways to reduce the capital charges caused by NMRFs, but they come at a price
SEC official defends delayed dealer registration rule
Regulator says market should be treated like equities, but PTFs warn it will harm market liquidity