MFA Comments to SEC on Proposed Short Selling Restrictions

MFA submitted a letter to the SEC in response to its request for comments on proposed short sale restrictions. MFA and its members believe the empirical data do not support the need for a short sale restriction, and that a short sale restriction would harm investors through decreased liquidity and pricing efficiency, and greater transaction costs. However, if the Commission determines that a short sale restriction is necessary and merited, we urge the Commission to consider a single security circuit breaker that triggers a modified uptick test as it would achieve the Commission’s objectives in the way least likely to cause market dislocation and other unintended consequences.