Document ID: SEC-2009-0629-0001
Agency: sec
Document Type: Notice
Title: Roundtable on Short Selling Price Test Restrictions and Short Sale Circuit Breakers
Posted Date: 2009-05-07T04:00Z

[Federal Register: May 7, 2009 (Volume 74, Number 87)]
[Notices]               
[Page 21423-21424]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr07my09-139]                         

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SECURITIES AND EXCHANGE COMMISSION

[Release No. 34-59855; File No. 4-581]

 
Roundtable on Short Selling Price Test Restrictions and Short 
Sale Circuit Breakers

AGENCY: Securities and Exchange Commission.

ACTION: Notice of roundtable discussion; request for comment.

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SUMMARY: In light of current instability in the financial markets and 
the erosion of investor confidence, the Commission is evaluating the 
issue of short sale price test restrictions and short sale circuit 
breakers. On April 8, 2009, the Commission unanimously voted to propose 
two new approaches to short selling regulation. The first approach 
proposes two permanent market-wide short sale price test restrictions. 
The second approach proposes three circuit breaker rules that, when 
triggered by a significant intraday decline in a security's price, 
would impose either a temporary halt on short selling of an individual 
security, or a temporary price test restriction.
    The proposing release is available on the Commission's Internet Web 
site at http://www.sec.gov/rules/proposed/2009/34-59748.pdf. The 
Commission will host a roundtable to discuss the effectiveness and 
impact of short sale price test restrictions generally, as well as the 
proposed regulatory alternatives. The roundtable discussion will be 
held in the auditorium of the Securities and Exchange Commission 
headquarters at 100 F Street, NE., in Washington, DC on May 5, 2009 
from 10 a.m. to approximately 3:30 p.m. The public is invited to 
observe the roundtable discussion. Seating will be available on a 
first-come, first-served basis. The roundtable discussion also will be 
available via webcast on the Commission's Web site at http://
www.sec.gov.

DATES: The roundtable discussion will take place on May 5, 2009. The 
Commission will accept comments regarding issues addressed in the 
roundtable discussion and otherwise regarding the proposed rule 
amendments until June 19, 2009.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/news/press.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number 4-581 on the subject line.

Paper Comments

     Send paper comments in triplicate to Elizabeth M. Murphy, 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090.

All submissions should refer to File Number 4-581. This file number 
should be included on the subject line if e-mail is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on the Commission's 
Internet Web site (http://www.sec.gov). Comments are also available for 
public inspection and copying in the Commission's Public Reference 
Room, 100 F Street, NE., Washington, DC 20549, on official business 
days between the hours of 10 a.m. and 3 p.m. All comments received will 
be posted without change; we do not edit personal identifying 
information from submissions. You should submit only information that 
you wish to make available publicly.

FOR FURTHER INFORMATION CONTACT: The Division of Trading and Markets, 
at (202) 551-5720, Securities and Exchange Commission, 100 F Street, 
NE., Washington DC 20549-7561.

SUPPLEMENTARY INFORMATION: On April 8, 2009, the Commission proposed 
amendments to Rule 201 of Regulation SHO under the Securities Exchange 
Act of 1934. The proposed amendments would permanently place 
restrictions on the prices at which NMS stocks may be sold short 
(``short sale price tests'' or ``short sale price test restrictions'') 
or would impose temporary limitations on short selling in a particular 
NMS stock during a specified market decline in the price of that 
security (``proposed circuit breaker rules''). In connection with the 
proposed short sale price tests and the proposed circuit breaker rules, 
the Commission also proposed to amend Regulation SHO to require that a 
broker-dealer mark a sell order ``short exempt'' if the seller is 
relying on an exception to a proposed short sale price test restriction 
or a proposed circuit breaker rule.
    The proposed amendments would come almost two years after the 
Commission eliminated all short sale price test restrictions in July 
2007. Prior to removing short sale price test restrictions, the 
Commission reviewed the issue extensively, sought public comment and 
directed staff study and empirical analysis on the market impact of 
short sale price test restrictions over a period of several years.
    As the current financial crisis has continued to erode investor 
confidence, the Commission has received requests from many commenters 
to consider imposing restrictions with regard to short selling, in 
particular to reinstate some form of short sale price test 
restrictions. Due to the extreme current market conditions, the 
Commission believes it is appropriate at this time to examine and seek 
comment on whether to impose a short sale price test or a short sale 
circuit breaker rule. The May 5, 2009 roundtable will help ensure that 
any policy decisions the Commission

[[Page 21424]]

makes based on these proposals is the product of a highly deliberate 
evaluation process.

    Dated: May 1, 2009.

    By the Commission.
Elizabeth M. Murphy,
Secretary.
[FR Doc. E9-10483 Filed 5-6-09; 8:45 am]

BILLING CODE 8010-01-P