The head of the Securities and Exchange Commission said Tuesday she is making the issue of new rules restricting short-selling a priority as the agency heard from an array of interests about ways to limit trades that bet against a stock.
Investors and lawmakers have been clamoring for the SEC to put new brakes on trading moves they say worsened the market's downturn.
Short-selling involves borrowing a company's shares, selling them, then buying them back when the stock falls and returning them to the lender. The short seller pockets the difference.
Investor confidence has been shaken as the market has plunged and new constraints against abusive trading are needed, say proponents of restoring a Depression-era rule that prohibits short sellers from making their trades until a stock ticks at least one penny above its previous trading price.
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