Subject: File No. S7-08-09
From: weizhong jiang
Affiliation: reg division, cboe

May 13, 2009

I do not see a big impact of uptick rule on reducing abusive short selling. People can bid uptick for one share and then short a million.

If I am correct, institutional players like mutual funds are still subject to strict rules in terms of position reporting and the timing of buy and sell, while many affiliations of large short sellers are not. Small retail size short selling does not amount to influence of any significance. So if we could work on those large short sellers (presumably hedge funds?) and impose them to hold short positions for a certain period of time, at least enough time to confirm the sources of the securities where they borrow, it would reduce abusive shorting selling dramatically because they can not short stocks just on momentum but rather on fundamentals or whatnot. This would also reduce or even stop naked short selling because it allows regulators to register and report their short positions.