September 28, 2009
I strongly urge you, at the minimum, to reinstate the traditional uptick rule for short sellers. To break it down in its simpliest form, short selling has many advantages and does help provide liquidity to the markets, however, allowing short selling without any restrictions is reckless and very harmful to the markets. I understand you are going to have some large companies and big names fighting to prevent reinstating the uptick rule but I hope you understand their motives and see through their words. Short sellers can be extremely successful with an uptick rule... and many were and have been successful during the decades it was instated prior to 2007. Naked short selling should be permanantly banned, pre-borrowing requirements should be set in place, and the uptick rule should be reinstated. These rules will not prevent any individual or corporation from making money by short selling, however, it will prevent a large collapse caused by short sellers as well as prevent abusive practices that can make a bad situation even worse (with the latest crisis as a perfect example).
I strongly urge you to take into account everyone's best interest, not just those solely looking out for their profits. Don't forget that the market performed very well and effectively while the uptick rule was in place, and while short selling didn't cause the crash of 2008/2009... abusive short selling without an uptick rule did make it worse.