Alert August 18, 2009

SEC Reopens Comment on Proposed Short Sale Restrictions under Reg. SHO and Requests Comment on Alternative Uptick Rule

The SEC announced that it is reopening the comment period on amendments to Reg. SHO discussed in SEC Release No. 34‑59748 (Apr. 10, 2009), in which the SEC proposed two approaches to restrictions on short selling: one that would apply on a market-wide and permanent basis and one that would apply only to a particular security during a severe market decline in the price of that security.  Although the comment period is reopened on all aspects of the April proposals, the current request for comment focuses on use of the alternative uptick rule, which would restrict short selling market-wide on an ongoing basis by allowing short selling only at a price above the currentnational best bid.  The reopened comment period continues through the 30th day following publication of the announcement in the Federal Register.