Health Sciences Group Inc (HESG)

[BigBake1]

Holy crap.... Lets go over SEC rule 200 again:

Rule 200 – Definitions and Marking Requirements. Rule 200 incorporates and amends Rules 3b-3, 10a-1(d) and 10a-1(e)(13). It defines ownership for short sale purposes, and clarifies the requirement to determine a short seller’s net aggregate position. It also incorporates requirements to mark sales in all equity securities “long,” “short,” or “short exempt.”

Rule 200(g) of Regulation SHO requires a broker-dealer to mark sell orders in any equity security as "long" or "short." Rule 200(a) defines a short sale as "any sale of a security which the seller does not own or any sale which is consummated by the delivery of a security borrowed by, or for the account of, the seller." Rule 200(g)(1) provides that "[a]n order to sell shall be marked "long" only if the seller is deemed to own the security being sold pursuant to paragraphs (a) through (f) of this section and either: (i) The security to be delivered is in the physical possession or control of the broker or dealer; or (ii) It is reasonably expected that the security will be in the physical possession or control of the broker or dealer no later than the settlement of the transaction." Rule 200(c) of Regulation SHO provides that a person shall be deemed to own securities only to the extent that he has a net long position in such securities. In addition, to determine its own net position, Rule 200(f) requires a broker-dealer to aggregate all of its positions in a security unless it qualifies for independent trading unit aggregation.

Reg SHO marking has nothing to do with actually "SHORTING" a stock, it is simply an OWNERSHIP marking as to who exactly owns the shares in the trade transaction on the initial leg of the trade transaction. If a broker Dealer is used the trade is going to be marked SHORT despite both retail being net LONG on the security.

I gave three outstanding examples yesterday as to what is marked LONG and what is marked SHORT. Anytime a broker cannot internalize an order it will be marked SHORT because it requires a broker dealer to complete the transaction. That broker dealer doesnt OWN the shares in the trade, and certainly doesnt have physical possession of those shares, the selling BROKER does.

Etrade is telling you that your shares in your account cannot be BORROWED against, that has nothing to do with REG SHO...