II 111th CONGRESS 1st Session S. 605 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.

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¢ 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.

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.

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.