Oberg: SEC Must Heed Uptick Rule Support

In 2007, when the SEC opened for comment the idea of eliminating the Uptick Rule, they received a grand total of 27 comments. Now two years later, the SEC is seeking comment on the idea of reinstating a version of the rule. Whether the removal of the Uptick Rule was causal or coincidental with the market's decline and spike in volatility, this time around people are making their voices heard.

Checking the SEC's website for comments this weekend, it looked like more than 2,000 people had registered their opinions on this matter.

Today, I am proud to announce, we will be delivering our comment letter to the commission, with 5,691 signatories -- which should bring the total public comments to nearly 8,000 voices. As those who joined us know, we feel that protecting market integrity and capital formation should be key aims of the SEC.

We inherently recognize that companies are not commodities, that the capital markets serve a broader purpose to our economy, and that a relatively simple mechanism can help restore some credibility to the markets -- a mechanism that still allows for the practice of short-selling but helps to provide a check and balance for our capital markets.

We also recognize that an Uptick Rule will not cause a Pax Romana for bear markets. Companies can still fail, and we are not seeking to prevent that. Short sellers can still ply their trade, and rightfully so (because with an Uptick Rule they become liquidity providers rather than liquidity takers), and short sellers can continue to have success, as they did for nearly seventy years with an Uptick Rule in place. In fact, an Uptick Rule should benefit those skill-based short sellers, who use fundamental research to their advantage, by eliminating the pretenders.