Commentary

Tim Quast
Traders Magazine Online News

We're All HFTs Now

In this guest commentary, author Tim Quast looks back at the history of HFT and how the market has evolved to where many firms now fit the definition of high-frequency trader.

Traders Poll

Are you in favor of a pilot program and examination of the rebate system by the SEC?




Free Site Registration

September 9, 2009

SEC Keeps Short-Sale Debate Alive

By Peter Chapman

As Traders Magazine was going to press, the Securities and Exchange Commission had received approximately 4,100 comments regarding its amendments to Regulation SHO, but apparently that was not enough.

In August, the regulator added a sixth proposal to its list of short sale price tests, giving the public another 30 days to weigh in on the need for restrictions on short sales.

The industry response to the SEC's first five proposals was overwhelmingly negative. Perhaps as a result, the SEC's latest proposal was one recommended by four of the nation's stock exchanges back in February.

Then, Nasdaq OMX, NYSE Euronext, BATS Trading and the National Stock Exchange recommended the SEC adopt a rule which required traders who wanted to short to do so at one increment above the best bid. That would have the effect of requiring traders to post an offer if they wanted to short a stock. They could not hit the bid.

The SEC and supporters of the plan maintain it would be easier for the industry to implement and comply with. Detractors argue it would make it more difficult to get a short off.

 

 

(c) 2009 Traders Magazine and SourceMedia, Inc. All Rights Reserved.

http://www.tradersmagazine.com http://www.sourcemedia.com/