The U.S. Securities and Exchange Commission is proposing a rule that would specify that abusive “naked” short selling is a fraud.

So-called naked short sales occur when the seller does not borrow, or arrange to borrow, securities in time to deliver them to the buyer within the standard three-day settlement period. The SEC says that sellers sometimes intentionally fail to deliver securities to the buyer as part of a scheme to manipulate the price of a security, or possibly to avoid borrowing costs associated with short sales.

To combat this, the commission voted unanimously to propose a new rule that would highlight the specific liability of parties who deceive others, such as broker-dealers and purchasers, about their intention or ability to deliver securities in time for settlement and that fail to deliver securities by settlement date.

“This rule proposal will help protect and enhance the operation, integrity and stability of the markets in the clearance and settlement system, and also puts market participants on notice that the Commission will continue targeting abuses in this area,” said Erik Sirri, director of the SEC’s Division of Trading and Markets.

The comment period for the proposal is 60 days.