Amendments to Regulation SHO and Rule 10a-1
The Securities and Exchange Commission (``Commission'' or ``SEC'') is proposing to amend the short sale price test under the Securities Exchange Act of 1934 (``Exchange Act''). The proposed amendments are intended to provide a more consistent regulatory environment for short selling by removing restrictions on the execution prices of short sales (``price tests'' or ``price test restrictions''), as well as prohibiting any self-regulatory organization (``SRO'') from having a price test. In addition, the Commission is proposing to amend Regulation SHO to remove the requirement that a broker-dealer mark a sell order of an equity security as ``short exempt,'' if the seller is relying on an exception from a price test.
Short Selling in Connection With a Public Offering
The Securities and Exchange Commission (``Commission'') is proposing amendments to Regulation M concerning the anti-manipulation rules for securities offerings that would further safeguard the integrity of the capital raising process and protect issuers from manipulative activity that can reduce issuers' offering proceeds and dilute security holder value. The proposal would prevent a person from effecting a short sale during a limited time period, shortly before pricing, and then purchasing, including entering into a contract of sale for, such security in the offering.