SEC Chairman Jay Clayton mentioned Monday that the apply of brief promoting successfully betting {that a} inventory will drop is required to "facilitate extraordinary market buying and selling."

"We should not be banning brief promoting," Clayton instructed CNBC's "Squawk Field."

Nevertheless, he mentioned the Securities and Trade Fee did exchange the outdated uptick rule with a brand new measure to assist mitigate the volatility that brief promoting can carry to an already agitated market just like the one which buyers have been coping with for weeks now due to the coronavirus disaster.

Many main buyers, together with billionaire Leon Cooperman earlier this month, are calling on the SEC to reinstate the uptick rule, which was applied 1938 however was eradicated in 2007 as digital buying and selling started to take over Wall Road.

Basically, the outdated uptick rule solely allowed buyers to brief a inventory or a safety on an uptick, which is outlined by a value improve relative to its earlier commerce.

"We did put in place, and never a number of...