This is the report given to SEC Christopher cox on 12/17/2008 regarding the “uptick rule”.
The “uptick rule” was designed to slow down short selling in stocks. Short selling is in essence selling a stock you do not own in the hope it will fall in price and you can buy it back later at a cheaper price, pocketing the difference.
The uptick rule was implemented to slow down the effect of large amounts of short selling. It requires short sellers to wait for a price rise essentially before selling shares. It is designed to stop short sellers from unbridled selling as the price drops and causing a cascading effect in the stock price.
It was removed last year and those who want it back say its removal is partly responsible for the collapse in the market.
Here is the report:
Analysis of Short Sale Price Test, Uptick Rule
Disclosure (“none” means no position):
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