Securities Law Updates | New Statutes, Regulations and Rules
February 25, 2010
SEC Approves Short Selling Restrictions
Alternative Uptick Rule on Short Selling
Rule 201, 2010-26, 2/24/2010
The Securities and Exchange Commission (“SEC,” or “Commission”) has adopted a new rule to place certain restrictions on short selling when a stock is experiencing significant downward price pressure. The measure is intended to promote market stability and preserve investor confidence.
According to the SEC, this alternative uptick rule is designed to restrict short selling from further driving down the price of a stock that has dropped more than 10 percent in one day. It will enable long sellers to stand in the front of the line and sell their shares before any short sellers once the circuit breaker is triggered.…
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