Regardless of what the uptick rule looks like when it is reinstated, it would make for a bad rule. If it is strict enough to prevent ‘bear raids’ then it would prohibit much good short selling too. If it is too weak to prevent bear raids then it will be pointless while still hampering legitimate short selling. That is why I (along with the major stock exchanges) support a type of circuit breaker. I believe that an individual stock circuit breaker that halts a stock completely would be good because I believe that most so-called bear raids are actually caused by panic selling or stop-loss selling by long investors.

Now, as to why the uptick rule wouldn’t prevent short sellers from driving a stock price down, imagine a stock where there are as many short sellers as long sellers. Without the uptick rule the short sellers could drive the stock price down quickly. But even with the uptick rule, the short sellers would show huge size on the offer, leading long sellers to hit the and causing market makers to lower their bids and offers. In such a situation the stock price decline would be only slightly slower than without the uptick rule; the main difference is the profits that would accrue to short sellers accrue to long sellers instead.