June 5, 2009
Good day madam/sir, please forward these comments to responsible party including Chairman Mary Schapiro.
This has been on several major blogs and most of us agree with its comments.
Exchanges Propose Fake Uptick Rule –.
Lawmakers from both parties are pushing for the reinstatement of the uptick rule. In a letter to SEC, US Exchanges NYSE, Nasdaq and others proposed last week what they callModified Uptick Rule”/ Their proposal is a sham.
This is what they propose (see the link below for the original letter): No rule is needed in a normal market. If a stock drops by 10%, a Circuit Breaker will trigger after which short selling will be controlled for the rest of the day. In the controlled environment (after the 10% drop!), shorting will be allowed only at a price above the highest prevailing national bid.
This is ludicrous. This is NOT uptick rule. It is Fake Uptick Rule. Frankly, it is an insult to all lawmakers seeking the reinstatement of the real uptick rule. I ask to CEOs of NYSE and Nasdaq Who are you trying to fool? Why are you in bed with the short sellers
The letter by the CEOs of the Exchanges is full of lies. They claimThis modified uptick rule is superior to the original uptick rule in several ways.”!Oh, ya The real uptick rule worked well for 70 years preventing mischiefs by shorts. You did not have to wait for the stock to go down 10%. It is like banks saying that they will turn on their security systems after some thieves rob 10% of their assets. What a joke! Our stock exchanges are now run by people who dance to the tune of powerful hedge funds from Greenwich, New York and elsewhere (Look for the ten largest hedge fund families and you will know who is really behind this BS).
Exchanges are also lying that it is very hard to implement uptick rule in todas decimal pricing environment. Decimal prices began on all stocks in April 2001. From April 2001 to July 2007 (when the uptick rule was removed), for six years, the exchanges complied with the uptick rule. Are they saying, computers are less powerful now than they were three years ago? That is baloney! (Actually, in a conference call in October 2008, NYSE CEO Niederauer had said that the uptick rule was easy to understand and was easy to re-implement.)
For NYSE and Nasdaq, this is also a major dereliction of their responsibilities towards their member companies. A poll by NYSE in 2008 said, 85% of its member companies want the uptick rule reinstated. BATS serves traders and short-sellers. So they are fighting to not bring back the rule.
SEC, Congressmen, mutual fund managers, millions of individual investors (who can not even short stocks in their 401Ks) You have been forewarned. Do not be fooled by lies and the fake uptick rule proposed by major exchanges. Please bring back the real uptick rule promptly! I hope that SEC does so but if they do not, it is time for Congress to act.