The Securities and Exchange Commission will meet this week to consider proposals for restricting abusive short selling of US stocks, with the reinstatement of some form of the so-called “uptick rule” expected to move a step closer.
The meeting of the US regulator, scheduled for Wednesday, comes as equity markets have staged a rally in recent weeks, leading some to question whether a return to the rule is necessary.
The SEC has been considering reinstating the uptick rule for some weeks after coming under political pressure to take action against short sellers, whom many hold responsible for driving down stock prices during the past 18 months.
The political pressure has remained, even as markets have staged a bear-market rally recently.
Last week, six US senators led by Ted Kaufman and Johnny Isakson wrote to Mary Schapiro, SEC chairman, saying they hoped the meeting would produce an “unambiguous commitment to promulgate and enforce regulations that put an end to naked short selling”.
The SEC has issued a brief agenda for the meeting but has not given details of what exactly it might propose. Most analysts expect that some form of the uptick rule will be in place by the end of this month.
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