U.S. Securities & Exchange Commission
SEC Seal
Home | Previous Page
U.S. Securities and Exchange Commission

Commission Announces SEC Roundtable on Regulation SHO Pilot


Washington, D.C., June 13, 2006 — The Securities and Exchange Commission announced today that it will host a roundtable on Sept. 15, 2006, at the Commission’s headquarters in Washington, D.C., to discuss the efficacy of rules that limit the execution prices of short sales, such as the Tick Test (Rule 10a-1 under the Securities Exchange Act of 1934) and the Bid Test (NASD Rule 3350). The discussion will focus on empirical evidence learned from the Regulation SHO Pilot. The roundtable will include a panel discussion by leading academic experts in addition to several research paper presentations.

The roundtable is open to the public, on a first-come, first-served basis. For planning purposes, members of the public wishing to attend are asked to notify the Commission by sending an e-mail to RegSHOPilot@sec.gov.

The Regulation SHO Pilot suspends the provisions of Rule 10a-1(a) under the Securities Exchange Act of 1934 (the Act) and any short sale price test of any exchange or national securities association for a subset of stocks. The pilot is intended to provide empirical data to help assess whether short sale price restrictions should be removed, in part or in whole, for US securities, or if retained, should be applied to additional securities. More information on the Regulation SHO Pilot can be found at http://www.sec.gov/spotlight/shortsales.htm.

“The Regulation SHO Pilot demonstrates the Commission’s commitment to base our regulatory decisions on sound empirical research,” said SEC Chairman Christopher Cox. “The pilot is a unique opportunity to better understand the effect of short selling price limits in US financial markets. This roundtable gives us access to leading academic experts, their findings and opinions. We welcome the opportunity to learn from those who conduct empirical research on Commission issues and we look forward to hearing about short selling research from these experts.”

The Commission further announced today that it is seeking written feedback from finance, economics, accounting, and law professors, brokers, dealers, exchanges, investors and others on their experiences and empirical evidence from the Regulation SHO Pilot.  In particular, how do price restrictions affect liquidity, volatility, and market efficiency? Does the evidence suggest eliminating or amending existing price restrictions? The information that is submitted will become part of the public record of the Regulation SHO Pilot.

The Office of Economic Analysis (202-551-6600), or OEA, is the chief advisor to the Commission and its staff on all economic issues associated with the SEC's regulatory activities. More information about the office and its staff can be found at http://www.sec.gov/about/economic.shtml. The OEA staff members coordinating the roundtable, including Chester Spatt, Jonathan Sokobin, Stewart Mayhew, Amy Edwards, Tim McCormick, and Allan Zebedee, welcome suggestions about potential papers and participants. These OEA staff members hope to finish inviting participants on or around Aug. 15, 2006.

Members of the public are encouraged to provide feedback and suggestions before Aug. 15, 2006. Submissions to the Commission may be provided by any of the following methods:

Electronic submissions:

Paper submissions:

  • Send paper submissions in triplicate to Nancy M. Morris, Secretary, Securities and Exchange Commission, 100 F Street, NE, Washington, DC 20549-1090.

All submissions should refer to File Number 4-520. This file number should be included on the subject line if e-mail is used. To help us process and review your submissions more efficiently, please use only one method. The Commission will post all submissions on the Commission’s Internet Web site (http://www.sec.gov/comments/4-520/4-520.shtml). All submissions received will be posted without change; we do not edit personal identifying information from submissions. You should submit only information that you wish to make available publicly.



Modified: 07/13/2006