Let's be honest! What's the difference? Does it really matter?
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SEC may Reinstate Uptick Rule
- Thread starter listedguru
- Start date
Quote from zdreg:
re:velocity
exactly. the politicians and the masses prefer a long lingering pain to a quick sharp pain. one of the purposes of markets is price discovery which the above mentioned and of late many ET posters are clueless about.
And you obviously continue to believe that stocks should be able to trade like commodities . . . yet you conveniently ignore the fact that commodities do not have employees, boards of directors, employee pension funds, etc.
I'm afraid that the SEC disagrees with you, and at the end of the day, that's all that matters.
Quote from zdreg:
note request for exemption from uptick by market makers. typical of the old boys network in operation.
Of course. But, it's also impossible to meet the requirement of making a two sided market unless you're exempt. But the exemption for them and lack of one for everyone else is the reason they love that rule.
Quote from Landis82:
And you obviously continue to believe that stocks should be able to trade like commodities . . . yet you conveniently ignore the fact that commodities do not have employees, boards of directors, employee pension funds, etc.
I'm afraid that the SEC disagrees with you, and at the end of the day, that's all that matters.
Complete BS. If the stock is worth $0, it's worth $0 no matter how many board of directors and other tripe it has. Value is value whether it's a commodity or a stock.
The SEC doesn't disagree. It's under enormous political pressure from the Orcs of Mordor in congress.
Quote from Landis82:
And you obviously continue to believe that stocks should be able to trade like commodities . . . yet you conveniently ignore the fact that commodities do not have employees, boards of directors, employee pension funds, etc.
I'm afraid that the SEC disagrees with you, and at the end of the day, that's all that matters.
If those employees and boards are ineffective and are not compete in their market they need to be put to bed. very bad agrument.
Quote from Angrycat:
Of course. But, it's also impossible to meet the requirement of making a two sided market unless you're exempt. But the exemption for them and lack of one for everyone else is the reason they love that rule.
So, it looks as if they won't be exempt. What does this mean? Can MMs operate normally? How in the world does the SEC even enforce it if the controls are normally in the brokerage software, MMs are normally their own brokerage, right?
http://online.wsj.com/article/BT-CO-20090408-713337.html
* APRIL 8, 2009, 3:36 P.M. ET
2nd UPDATE: SEC To Seek Comments On Proposed Short-Sale Rules
WASHINGTON (Dow Jones)--The U.S. Securities and Exchange Commission voted unanimously Wednesday to seek public comments on five possible rules to limit short selling.
The proposed rules cover market-wide sales restrictions and limits on individual stocks in rapid decline. The comment period will be open for two months, after which the SEC will decide which provisions to make final.
The market-wide limits include a selling restriction patterned after a retired "uptick" rule and a modified uptick rule similar to Nasdaq's former bid test.
The proposals on individual stock restrictions are three different types of "circuit-breaker" models that, after a 10% market decline during the trading day, impose either an uptick limit, a bid test restriction or an outright short-selling ban.
All five proposals included some exemptions, although market makers would not be included.
"Today we begin what will be a thoughtful, deliberative process to determine what is in the best interests of investors." SEC Chairman Mary Schapiro said, noting the short sale issue has generated more public feedback than any other issue since she was confirmed in January.
While all five of the SEC's commissioners supported a review of possible short-selling restrictions, both of the SEC's Republicans appeared skeptical that a return of uptick rules would have the desired impact.
"If short-sale price tests do not effectively advance their stated purposes, we need to consider how investors might respond," Commissioner Troy Paredes said.
SEC Trading and Markets Director Erik Sirri said his division favors a bid-test rule rather than an uptick model because it's easier to implement and might be more effective in today's faster-paced stock markets.
"Today's markets are faster," Sirri said. "We have stocks today that trade over a hundred times a second."
The proposed uptick rule would prohibit short selling below or at the last sale price, unless the selling price is higher. The proposed "modified uptick rule" would bar short selling below the best market price for a stock.
Sirri said the SEC could adopt just one restriction or pass a market-wide rule in conjunction with one of the circuit breaker models.
Commissioner Luis Aguilar, a Democrat, cautioned that any new rules could be circumvented if short-sellers migrate to unregulated derivatives such as credit-default swaps.
"Congress must provide the Commission with the power to regulate swaps so the Commission can provide consistent regulation across the capital markets," Aguilar said.
Short selling is the sale of borrowed shares by an investor hoping to profit by buying an equal number of shares later at a lower price to replace the borrowed stock. The two prior short selling restrictions were abolished in 2007 after economic studies found they had little impact.
Separately, the SEC must also decide whether to extend temporary short selling restrictions that will expire this summer, including one addressing abusive naked short-sales.
* APRIL 8, 2009, 3:36 P.M. ET
2nd UPDATE: SEC To Seek Comments On Proposed Short-Sale Rules
WASHINGTON (Dow Jones)--The U.S. Securities and Exchange Commission voted unanimously Wednesday to seek public comments on five possible rules to limit short selling.
The proposed rules cover market-wide sales restrictions and limits on individual stocks in rapid decline. The comment period will be open for two months, after which the SEC will decide which provisions to make final.
The market-wide limits include a selling restriction patterned after a retired "uptick" rule and a modified uptick rule similar to Nasdaq's former bid test.
The proposals on individual stock restrictions are three different types of "circuit-breaker" models that, after a 10% market decline during the trading day, impose either an uptick limit, a bid test restriction or an outright short-selling ban.
All five proposals included some exemptions, although market makers would not be included.
"Today we begin what will be a thoughtful, deliberative process to determine what is in the best interests of investors." SEC Chairman Mary Schapiro said, noting the short sale issue has generated more public feedback than any other issue since she was confirmed in January.
While all five of the SEC's commissioners supported a review of possible short-selling restrictions, both of the SEC's Republicans appeared skeptical that a return of uptick rules would have the desired impact.
"If short-sale price tests do not effectively advance their stated purposes, we need to consider how investors might respond," Commissioner Troy Paredes said.
SEC Trading and Markets Director Erik Sirri said his division favors a bid-test rule rather than an uptick model because it's easier to implement and might be more effective in today's faster-paced stock markets.
"Today's markets are faster," Sirri said. "We have stocks today that trade over a hundred times a second."
The proposed uptick rule would prohibit short selling below or at the last sale price, unless the selling price is higher. The proposed "modified uptick rule" would bar short selling below the best market price for a stock.
Sirri said the SEC could adopt just one restriction or pass a market-wide rule in conjunction with one of the circuit breaker models.
Commissioner Luis Aguilar, a Democrat, cautioned that any new rules could be circumvented if short-sellers migrate to unregulated derivatives such as credit-default swaps.
"Congress must provide the Commission with the power to regulate swaps so the Commission can provide consistent regulation across the capital markets," Aguilar said.
Short selling is the sale of borrowed shares by an investor hoping to profit by buying an equal number of shares later at a lower price to replace the borrowed stock. The two prior short selling restrictions were abolished in 2007 after economic studies found they had little impact.
Separately, the SEC must also decide whether to extend temporary short selling restrictions that will expire this summer, including one addressing abusive naked short-sales.
Quote from Susannah:
So, it looks as if they won't be exempt. What does this mean? Can MMs operate normally? How in the world does the SEC even enforce it if the controls are normally in the brokerage software, MMs are normally their own brokerage, right?
You can argue all you want, if you want. but regulation is coming. The lawmakers are already convinced. The more the SEC squirms and denies, the more onerous the legislation.
All you have to do is wave a picture of Madoff. You can pass any law you want.