SEC Head Says 'uptick Rule' May Be Reinstated

By MARCY GORDON

WASHINGTON (AP) — Dramatic changes in the global economy may merit restoring a federal rule aimed at preventing a massive plunge in a stock price caused by a rush of short sellers, the head of the Securities and Exchange Commission said Wednesday.

SEC Chairman Mary Schapiro said "hopefully" by next month the agency will open for public comment a proposal to reinstate the so-called uptick rule.

On another crisis-related issue — an industry push to scrap the accounting rule that forces banks to value assets at current prices — Schapiro said the SEC wants revisions that would continue to provide the transparency investors need without excessively hurting banks.

The uptick rule, which the SEC eliminated in 2007, requires short sellers — those who try to profit from a stock's decline by selling borrowed shares — to sell at a price above a stock's most recent trading price.

"The world has changed rather dramatically in the past year," Schapiro told a House Appropriations subcommittee. "Hopefully we'll get our proposal out in April."