SEC Advances 5 Options On Short-Selling Rules

By: Associated Press Email
By: Associated Press Email

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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.

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