Today, the SEC Commissioners voted unanimously to seek public comment on five proposed rules relating to short selling. Although the Commission voted 5-0 to release the proposals for comment, it was clear during discussion at the meeting that the Republican members of the Commission, Commissioners Casey and Paredes, were skeptical of which, if any, of the proposed rules should be adopted, and it was not clear which of the five proposals the other Commissioners might favor.

The Commission voted to release for comment two variations on a general uptick rule: The first would reinstate the rule as it was prior to its repeal by the SEC in 2007. This would ban, as before, short sales unless the last sale price was higher than the previous sale price. The second version of the uptick rule (characterized by the SEC as a “modified uptick rule”) would make short selling permissible only at a price above the highest prevailing national bid. This modified uptick rule mirrors the suggestion in a recent letter to the Commission from the CEO’s of the NASDAQ OMX Group, NYSE Euronext, BATS Exchange, Inc., and the National Stock Exchange.

The SEC also approved for release three variations of a security-specific short selling “circuit breaker." The first (a “circuit breaker halt” rule) would halt short sales in a security for the remainder of the day if the trading price has decreased by 10% or more during that day. The second (a “circuit breaker uptick” rule) would apply the sale-price uptick rule a particular security for the remainder of the day if the trading price has declined 10% or more during that day. The third proposal (a “circuit breaker modified uptick” rule) would apply the modified uptick rule to a security for the remainder of the day if the trading price has declined 10% or more during that day.

The SEC Commissioners all expressed interest in the dialogue that the proposed rules are likely to initiate. Chairman Shapiro and Commissioners Paredes and Aquilar also released their opening statements.

The SEC will be accepting comments on the proposals for 60 days following their publication in the Federal Register.