The Securities and Exchange Commission Dec. 4 proposed unanimously to repeal a short-sale price test--the outmoded Tick Test--adopted in 1938 to prevent downward manipulations of stock prices, or "bear raids," and to ban the use of price tests by NASD and other self-regulatory organizations. At an open meeting, the commission also voted unanimously to propose amendments to another anti-manipulation rule, Rule 105 under Regulation M, which is addressed at abusive short-selling just prior to the pricing of a public offering. The comment deadline for both proposals--the first of which poses some 90 questions for comment--will be 60 days after publication in the Federal Register. Commissioner Paul Atkins called the proposed elimination of the Tick Test "groundbreaking." He remarked that the SEC found in its pilot study under Regulation SHO--on short sales--that the rule "simply was not needed" (36 SRLR 1156, 6/28/04 ). Former SEC Chief Economist Larry Harris, now the Fred V. Keenan Chair in Finance at the University of Southern California Marshall School of Business, told BNA Dec. 4 in a telephone interview, "It's a very welcome development. The removal of these tick tests will eliminate an essentially completely ineffective regulation that, frankly, had little purpose." Harris urged that next, the SEC should tackle the issue of naked short selling. Chairman Christopher Cox described the Tick Test--Rule 10a-1 under the 1934 Securities Exchange Act--as a price test that permits short-selling only at a price above the last sale price or at the last sale price if that is higher than the previous price. The Tick Test applies only to listed securities, except Nasdaq-listed securities.