Rule 10a-1

Rule 10a-1

An SEC rule that formerly prohibited a short sale except on a plus tick or a zero plus tick. That is, Rule 10a-1 disallowed short sales at a price below the price at which the security traded most recently. This rule was intended to prevent short sellers from artificially deflating a security's price so that it harmed other investors. It was also called the uptick rule. It was replaced by Regulation SHO in 2007. Some have argued for its reintroduction.

Rule 10a-1

A 1939 SEC rule that prohibits the short sale of a security at or below the last price at which that security was traded, unless the last price was higher than the previous different price. Rule 10a-1 was instituted to keep short sellers from battering down the price of a stock.
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5 /PRNewswire/ -- Hemispherx Biopharma (Amex: HEB) today disclosed in response to investor inquiries that the law suit that the company filed against Asensio & Company and other defendants last week alleged that the defendants engaged in the following illegal trading activities: "Defendants' illegal short selling included, but was not limited to, selling on the 'down tick' in violation of AMEX Rule 7 and SEC Rule 10a-1, and selling 'naked' at a time when the defendant short sellers neither owned, nor had reason to believe they could borrow, sufficient shares to make delivery on their short sales in violation of applicable industry rules and regulations.
The first Short Sale Rule, Rule 10a-1 of the 1934 Exchange Act was approved by the SEC in 1938 in response to a sharp market decline in the fall of 1937.
In large measure, the proposed rule will have the same impact on trading in Nasdaq/NMS securities as SEC Rule 10a-1 currently has on exchange-listed securities.
Exemptions, where applicable, would track SEC Rule 10a-1 for short sales in exchange-listed securities.