Wednesday, April 8, 2009
Federal regulators have proposed five options for reining in the short-selling of stocks as investors and lawmakers clamor for brakes on moves they say worsened the market's downturn.
The Securities and Exchange Commission voted unanimously to advance a handful of approaches to new rules restricting short-selling, in which traders try to profit from a stock's decline by selling borrowed shares.
One of the options put forward for public comment involves restoring the so-called uptick rule, which requires short sellers to wait to sell shares until a stock trades at least a penny above its previous trading price.
The SEC could settle on one short-selling plan and formally approve it sometime after a 60-day comment period.