March 5, 2009

Subject: Please Reinstate Uptick Rule

Madam Chairwoman:

Let me begin with congratulating you for boosting the confidence of the staff at SEC.

The destruction of wealth that we have seen in last 18 months has been unprecedented and I attribute this to one and only one rule known as 'Uptick Rule". The Bloomberg News reported yesterday under the heading "Short-Sale Rule Undermined as Bernanke Backs Review " that the SEC did the study in December 2008 and found it inadequate.

What baffles me is that the SEC only did testing in 1 cent increment and did not do it in 5 and 10 cents increments. There is no reason to do testing in 1 cent increment, we know that does not work due to large volumes. But 5 or 10 cents increment will work.

Some people contend that 5 or 10 cents increment is too much, to them I say how about $100 stock that is going for $4 how many cents are those. Also, if they are in the stocks for 5 or 10 cents gain, then they should not be in the market in the first place.

In absence of "Uptick Rule", long term buyers are not remotely comfortable to buy a stock at any price as they find themselves defenseless in wake of "BEAR RAID". There are hundrerds of stocks excluding the financials that are going for one third of their book value. The shorts are able to price in 5 years worth of losses in the earnings even when management has provided guidance for a profit. The volatility in the market is mind boggling. The stocks loose 60-70% of their value in straight line in matter of days and continue to slide. This is not govern by any fundamentals. The absence of the uptick rule provides the bears an ulterior motive to create fear, panic, and pandemonium in these tumultuous times for quick and easy profit. The uptick rule eliminates this ulterior motive.

Please reinstate the Uptick Rule, this alone will bring confidence in the market. Once the buyers have enough confidence that the stocks will be bought and sold based on fundamentals not on fear mongering or relentless short selling, the stocks will start bouncing back. Merger and Acquisition activities will pick up, managements will have more confidence in their future and they will start hiring again.

The bounce in Wall Street will restore confidence on Main Street and they will start feeding each other in a positive way. Right now, we have exactly the opposite situation.



Vineet Agrawal