We said it at the BARRON’S Roundtable…
We repeat it again….
Reinstate the uptick rule
January 21, 2008 - BARRON’S Roundtable Part 2
Gabelli: The Securities and Exchange Commission has to reestablish the uptick rule. Its elimination last year was a disgrace. [The rule, which was eliminated in July, required short sales to occur at a price higher than the price of the previous trade, thus preventing short sellers from adding to a security’s downward momentum.] Something is needed to buffer the market when it’s down so sharply. Without the uptick rule, a computerized trading program can short, short and short, which has exacerbated the normal return of volatility. Over time, long-term investors will need higher returns to compensate for the higher volatility.
That’s not good for the system. The situation should be examined and fixed.
January 26, 2009 - BARRON’S Roundtable Part 3
Gabelli: …. The uptick rule [regulating short sales of stocks] should be reinstated. Hedge funds should be regulated and transparent about their leverage. Under current regulations, companies can be taken over by entities that buy their debt without reporting ownership. There should be transparency about this to eliminate backdoor raids.
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