Uptick rule to make a comeback?

Short selling has been a big regulatory concern lately. As you know, at some point, regulatory change gets very expensive. Recall that Regulation NMS ended up costing Wall Street firms hundreds of millions of dollars. We've suggested that the recent rule banning naked shorting of some financial stocks could end up costing firms whose systems aren't set up for it. Now comes news, from Traders, that the SEC is considering a return to the old uptick rule, which was nixed by Reg SHO. This is part of the recent movement to curb shorting in the wake of the Bear Stearns fiasco. The intentions are honorable, but you have to wonder if such a rule can really exist in an era of penny increments and high volume. Many will say no. It may be that a version of the former rule can be created--perhaps at larger increments--that can have a legitimate impact. If so, you can bet it will add to systems costs.  

For more:
- here's the Traders article