Amendments to Regulation SHO (Proposed rule; notice of re-opening of comment period and supplemental

1selling. The Proposal was published for comment on April 20, 2009 and the comment period 2 initially closed on June 19, 2009. I. INTRODUCTION In the Proposal, we proposed two approaches to restrictions on short selling: one that would apply on a market-wide and permanent basis (“short sale price test” or “short sale price test restriction”) and one that would apply only to a particular security during a severe market 3decline in the price of that security (“circuit breaker”). With respect to the first approach, we proposed two alternative short sale price tests: one based on the current national best bid (the “proposed modified uptick rule”) and the second based on the last sale price (the “proposed uptick rule”). With respect to the second approach, we proposed two alternative circuit breaker tests: one that would temporarily prohibit short selling in a particular security when there is a severe decline in the price of that security; and one that would temporarily impose either the proposed modified uptick rule or the proposed uptick rule on short sales in a particular security when there is a severe decline in the price of that security. Although we sought comment on the alternative uptick rule, it was not one of the proposed approaches. The Proposal sought comment on all aspects of the proposed approaches to restrictions on short selling. Among other things, the Proposal inquired whether the alternative uptick rule, which would permit short ...