On February 24, 2010, the Securities and Exchange Commission (SEC) adopted a new rule (the “Alternative Uptick Rule”) restricting the execution or display of short sale orders for certain securities under certain market conditions. Under the Alternative Uptick Rule, a circuit breaker would be triggered any time a stock has dropped 10% or more in one day from the prior day’s closing price. At that point, the Alternative Uptick Rule would permit short selling only at a higher price than the current national best bid, unless an applicable exception applies. Once the circuit breaker has been triggered, the Alternative Uptick Rule would apply to short sale orders in that security for the remainder of the day, as well as the following day.
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