Financial professionals, academic experts and the U.S. broker-dealer watchdog agree the Securities and Exchange Commission should not reinstate its old uptick rule to regulate short selling but disagreed on what other measures would be effective.

At a day-long meeting on Tuesday, the SEC examined a handful of proposals to restrict short selling after a year in which U.S. markets lost trillions of dollars amid the economic crisis.

Short sellers, who make bearish bets on stocks, have been blamed for contributing to the market decline. They contend that short selling helps the market operate efficiently.

The SEC is considering five proposals, including reinstating an updated version of the Depression-era uptick rule, which would only allow short sales when the last price was higher than the previous price.

None of the SEC proposals received overwhelming support at the public meeting on Tuesday. The only thing on which experts achieved some sort of consensus was their opposition to proposed legislation that would force the SEC to reinstate its old uptick rule. The rule was abolished in 2007 after the SEC concluded it was no longer effective in modern markets.

The commission did the right thing in removing the old uptick rule because it was useless, said James Angel, a professor at Georgetown University.

Other proposals under SEC consideration include a bid test or modified version of the uptick rule, which would only allow shorting if the best available bid were higher than the last bid.

Three other possible measures would use a circuit breaker approach to trigger a temporary suspension of short selling in a particular stock, or temporary application of the uptick or bid rule in a security.

I don't think the uptick or bid test is needed, said Richard Ketchum, chief executive of the Financial Industry Regulatory Authority, the broker-dealer industry watchdog. Ketchum, who recently replaced SEC's Schapiro as the head of FINRA, said a circuit breaker was a better approach.

Dan Mathisson, managing director at Credit Suisse, said a circuit breaker that would temporarily halt short selling in a particular stock would be the most effective.

It gives management breathing space, he said.

Mathisson said the old uptick rule was completely ineffective given that stocks trade in much smaller increments than when the rule was first adopted after the 1929 market crash.

SEC Chairman Mary Schapiro has not indicated whether she supports the reinstatement of the uptick rule and said on Tuesday that the roundtable discussion will help in advancing the debate over short sale price tests and short sale circuit breakers.

(Reporting by Rachelle Younglai, editing by Gerald E. McCormick)