A Securities and Exchange Commission (SEC) regulation that put a restriction short sales being placed on a downtick in the shares of stock. Short selling was only allowed on an uptick (last trade is higher than the previous trade) or zero-plus ticks (last trade is the same as previous).
Additional meaning of Short Sale Rule:
In 2007, the Short Sale Rule regulation was removed by decree of the SEC. Now short sales can be made on any price tick in the market, whether the stock price ticks up or down.
May also be known as the "plus-tick rule", "tick-test rule", or "uptick rule".