Hedge Funds Politics & Regulation

Uptick rule could get Lazarus treatment

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If Securities and Exchange Commission Chairman Mary Schapiro has her way, hedge fund managers could once again find themselves subject to the regulator’s former “uptick” rule, a Depression-era decree designed to make it harder for traders to engage in short selling. Shapiro, along with a handful of regulators, believes that reviving the rule would curb hedge fund managers’ short selling activities and protect the market from extreme declines.

Established in 1938 in response to the market crash that set off the Great Depression, the rule states that a short sale in a stock can only be made at