The commission has made permanent a temporary rule that reduces the opportunity for so-called "naked" short selling, which involves an investor selling shares short before borrowing them.
Under the new legislation, known as Rule 204, broker-dealers are now required to purchase or borrow securities promptly in order to deliver on a short sale.
The SEC also said that it is working alongside a number of self-regulatory organizations (SROs) in order to increase the availability of short sale volume and transaction information on SRO websites.
"Today's actions demonstrate the commission's determination to address short selling abuses," SEC chairman Mary Schapiro stated, adding that the move will also increase the level of public disclosure regarding such activity.
Earlier this month, the SEC charged a Florida resident with stealing over $15 million in investor funds