Publications

Analysis of the New Short Sale Rules Proposed by the Securities and Exchange Commission

June 4, 2009
SRZ Client Memorandum

On April 10, 2009, less than two years after eliminating all price restrictions on short sales, the Securities and Exchange Commission (“SEC”) published a release seeking comment on two alternatives for reinstating short sale price restrictions and three versions of a less pervasive circuit breaker rule, which would impose such restrictions only upon a significant intra-day price decline in a stock and only for the impacted stock. See “Amendments to Regulation SHO,” SEC Release No. 34-59748 (April 10, 2009)(“Proposing Release”). On May 5, 2009, the SEC hosted an all-day “Roundtable to Examine Short Sale Price Test and Circuit Breaker Restrictions” (“Roundtable”), during which the Commission heard statements from and asked questions of three panels, comprised of representatives of self-regulatory organizations, retail and institutional broker-dealers, hedge funds, public companies and academia.