[Congressional Bills 111th Congress]
[From the U.S. Government Publishing Office]
[S. 605 Introduced in Senate (IS)]

111th CONGRESS
  1st Session
                                 S. 605

  To require the Securities and Exchange Commission to reinstate the 
 uptick rule and effectively regulate abusive short selling activities.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                             March 16, 2009

 Mr. Kaufman (for himself, Mr. Isakson, and Mr. Tester) introduced the 
 following bill; which was read twice and referred to the Committee on 
                  Banking, Housing, and Urban Affairs

_______________________________________________________________________

                                 A BILL


 
  To require the Securities and Exchange Commission to reinstate the 
 uptick rule and effectively regulate abusive short selling activities.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. REINSTATEMENT REQUIRED.

    Not later than 60 days after the date of enactment of this Act, the 
Securities and Exchange Commission (in this Act referred to as the 
``Commission'') shall--
            (1) reinstate the substance of that portion of the 
        regulations in effect on July 5, 2007, that prohibited short 
        sales not effected on a plus tick;
            (2) rescind rule 201 of regulation SHO, at section 242.201 
        of title 17, Code of Federal Regulations, as in effect on the 
        date of enactment of this Act;
            (3) require trades by short sellers of securities to yield 
        priority and preference to transactions effected by long 
        sellers of securities;
            (4) with the concurrence of the Secretary of the Treasury 
        and the Chairman of the Board of Governors of the Federal 
        Reserve System, prohibit short sales of the securities of any 
        financial institution, unless that trade is effected at a price 
        (in minimum lots, as specified by the Commission) that is at 
        least 5 cents higher than the immediately preceding transaction 
        in such securities;
            (5) adopt such rules and regulations, consistent with 
        paragraphs (1) through (4), as necessary to prohibit any person 
        from engaging in any conduct that artificially would create a 
        plus tick or satisfy the price requirements set forth in the 
        short sales regulations of the Commission; and
            (6) take such other actions as may be necessary or 
        appropriate to make the regulation of short sales by the 
        Commission consistent with the requirements of this Act.

SEC. 2. MANDATORY SETTLEMENT PREPAREDNESS REQUIREMENT.

    Not later than 60 days after the date of enactment of this Act, the 
Commission shall issue regulations prohibiting any person from selling 
securities short, unless that person demonstrates, at the time of the 
sale, that such person possesses, at the time of the sale, a 
demonstrable, legally enforceable right to deliver the securities at 
the required delivery date.

SEC. 3. MANDATORY SETTLEMENT TIMES FOR SHORT SALES.

    Not later than 60 days after the date of enactment of this Act, the 
Commission shall issue regulations to require that all short sales 
settle on the same time frame employed for long sales of the same 
securities.
                                 <all>