Thank you. Great work on your part. I found this SUMMARY of the short sale -related short restriction very interesting to say the least. THe true short position on ANY should be coming shortly so we will know the true declared short position and the undeclared short position. I do not know what that undeclared number is, but if the shorts have been hiding a large undeclared number the ramifications could be significant. Thanks for your insights. IMO
SECURITIES AND EXCHANGE COMMISSION 17 CFR PART 242
Release No. 34-61595; File No. S7-08-09
RIN 3235-AK35
Amendments to Regulation SHO
AGENCY: Securities and Exchange Commission.
ACTION: Final rule.
SUMMARY: The Securities and Exchange Commission (“Commission”) is adopting amendments to Regulation SHO under the Securities Exchange Act of 1934 (“Exchange Act”). We are adopting a short sale-related circuit breaker that, if triggered, will impose a restriction on the prices at which securities may be sold short (“short sale price test” or “short sale price test restriction”). Specifically, the Rule requires that a trading center establish, maintain, and enforce written policies and procedures reasonably designed to prevent the execution or display of a short sale order of a covered security at a price that is less than or equal to the current national best bid if the price of that covered security decreases by 10% or more from the covered security’s closing price as determined by the listing market for the covered security as of the end of regular trading hours on the prior day. In addition, the Rule requires that the trading center establish, maintain, and enforce written policies and procedures reasonably designed to impose this short sale price test restriction for the remainder of the day and the following day when a national best bid for the covered security is calculated and disseminated on a current and continuing basis by a plan processor pursuant to an effective national market system plan.
We believe it is appropriate at this time to adopt a short sale-related circuit breaker because, when triggered, it will prevent short selling, including potentially manipulative or abusive short selling,
from driving down further the price of a security that has already experienced a significant intra- day price decline, and will facilitate the ability of long sellers to sell first upon such a decline. This approach establishes a narrowly-tailored Rule that will target only those securities that are experiencing significant intra-day price declines. We believe that addressing short selling in connection with such declines in individual securities will help address erosion of investor confidence in our markets generally.
In addition, we are amending Regulation SHO to provide that a broker-dealer may mark
certain qualifying sell orders “short exempt.” In particular, if the broker-dealer chooses to rely
on its own determination that it is submitting the short sale order to the trading center at a price
that is above the current national best bid at the time of submission or to rely on an exception
specified in the Rule, it must mark the order as “short exempt.” This “short exempt” marking
requirement will aid surveillance by self-regulatory organizations (“SROs”) and the Commission
for compliance with the provisions of Rule 201 of Regulation SHO.
DATES: Effective Date: May 10, 2010
Compliance Date: November 10, 2010
