SEC Delays Short Sale Circuit Breaker Compliance Date

Funds & Advisers

The SEC extended the compliance date for amendments to Rule 201 of Regulation SHO under the Securities Exchange Act of 1934 from November 10, 2010, to February 28, 2011. The SEC issued the release after learning that enforcing the initial compliance date may be problematic for industry participants. Delays in the programming process require additional time for certain exchanges to modify current procedures to comply with the rules. The added time will also allow the exchanges to conduct further programming and testing for compliance with the new requirements.

Rule 201 requires that certain trading centers establish written policies and procedures to prevent short selling of a covered security at a price less than or equal to the national best bid if the price of the security decreases by 10% or more from the prior day’s closing price. For more information on the amendments to Regulation SHO, see our compliance alert here.








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