Updated from 10:34 a.m. EDT

The chairwoman of the Securities and Exchange Commission told a Senate committee Thursday that the agency will consider reinstating the so-called uptick rule at its next meeting in early April.

During a hearing Thursday before the Senate Banking Committee, SEC Chair Mary Schapiro said that in addition to proposals regarding the uptick rule, the firm will also consider some sort of bid test, a circuit breaker, or a combination of those. The SEC's next open meeting is scheduled for April 8 in Washington.

"To target potentially abusive 'naked' short selling in certain equity securities, the Commission has tightened up the close-out requirements and adopted a new antifraud rule specifically aimed at abusive short selling when it is part of a scheme to manipulate the price of a stock," Schapiro said. "And, early next month, the Commission will consider proposals to re-institute the uptick rule, or something much like it."

The uptick rule, instituted by the SEC following the Great Depression, said that the short selling of stocks could be done only after the share price ticked higher above the prior sale. The rule was designed as a guardrail that slowed down the short selling process, preventing short sellers from driving the price of a stock at a faster clip.

In a short sale, an investor can borrows a stock from a broker, sell it to other investors, and buy it back at a lower price before returning it to the original lender. The difference in the transactions is kept as a profit.

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