On Wednesday's split 3-2 vote along party lines, the Securities and Exchange Commission approved new restrictions on short sales that aim to improve investor confidence in the markets.

Rule 201, also known as the alternative uptick rule, will impose restrictions on short sales once a stock triggers the "circuit breaker," a 10% drop in a single day. The uptick rule will apply to short sale orders in that security for the rest of the day, as well as the following day.

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