Abstract

http://ssrn.com/abstract=1718137
 
 

References (51)



 
 

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Short Selling: The Impact of SEC Rule 201 of 2010


Chinmay Jain


University of Ontario Institute of Technology

Pankaj K. Jain


University of Memphis - Fogelman College of Business and Economics

Thomas H. McInish


University of Memphis - Fogelman College of Business and Economics

November 30, 2010


Abstract:     
Despite its sizable compliance costs, we are unable to document any clear benefits of SEC Rule
201 in ensuring fair valuations and price stability, promoting higher liquidity and execution
quality, or preventing a sudden flash crash or prolonged market crises. Our daily and intraday
analysis of data both before and after Rule 201 finds that short sellers are naturally more active
before the occurrence of negative returns, not after significant price declines. Our simulation
results show that Rule 201 further curtails short selling during normal periods, but is not binding
on short sellers during the volatile period of the 2008 financial crisis.

Number of Pages in PDF File: 45

Keywords: Short Selling, Rule 201, Alternative Uptick Rule

JEL Classification: G10

working papers series


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Date posted: December 2, 2010 ; Last revised: December 4, 2011

Suggested Citation

Jain, Chinmay and Jain, Pankaj K. and McInish, Thomas H., Short Selling: The Impact of SEC Rule 201 of 2010 (November 30, 2010). Available at SSRN: http://ssrn.com/abstract=1718137 or http://dx.doi.org/10.2139/ssrn.1718137

Contact Information

Chinmay Jain (Contact Author)
University of Ontario Institute of Technology ( email )
2000 Simcoe Street North
Oshawa, Ontario L1H 7K4
Canada
Pankaj K. Jain
University of Memphis - Fogelman College of Business and Economics ( email )
Memphis, TN 38152
United States
Thomas H. McInish
University of Memphis - Fogelman College of Business and Economics ( email )
Memphis, TN 38152
United States
901-678-4662 (Phone)
901-678-3006 (Fax)
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