Uptick Rule Quietly Implemented; Positive Step Towards Capital Market Confidence

As we had mentioned in our prior post, the SEC voted, and approved, 3-2 (surprisingly close) to re-instate the Uptick/Downtick/Short Selling rule.

We applaud the reinstatement and are slightly disappointed in the meager fan fare it has received up to this point. Comments on the subject will most likely include quotes from prominent short-sellers who have negative comments on the subject, stemming from the fact that the repeal of this rule was not the reason the markets cascaded downward over the past two years.

The repeal of this rule was not the only reason for negative market movements, but in our opinion, was one of a series of events that contributed to it, a perfect storm of events, so to speak. In our opinion, protection, and stability,  for long term confidence in the markets is extremely important,  and the re-instatement of this rule is helpful in achieving this.

New Rule Facts-

  • Take effect again in six months (Most firms will implement sooner in order to gain compliance)
  • Rules are triggered once a stock drops 10% (Prior rules had no such band)

Have a Good Day!

JK

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