April 14, 2009
The Toronto Stock Exchange has a short sale policy that is most effective. On the TSE a short seller can sell on all plus ticks but only sell on a minus tick if a long seller makes a sale there first. This allows short sellers to provide liquidity to the market and keeps them from directly driving a stock into a free fall. This policy has been in place a long time and strikes a good balance. It is curious that no one at the SEC has considered copying this policy.