Wrong, there will not be an FTD because the short side is meeting their obligation. CDEL is self-clearing.
DEFINITION of 'Failure To Deliver'
An outcome in a transaction where one of the counterparties in the transaction fails to meet their respective obligations. When failure to deliver occurs, either the party with the long position does not have enough money to pay for the transaction, or the party in the short position does not own the underlying assets that are to be delivered. Failure to deliver can occur in both equity and derivatives markets.
BREAKING DOWN 'Failure To Deliver'
Whenever a trade is made, both parties in the transaction will have to transfer the cash and assets before the settlement date. Subsequently, if the transaction is not settled, one side of the transaction has failed to deliver. Failure to deliver also can occur if there is a technical problem in the settlement process carried out by the respective clearing house.
"An RS is considered a dividend, only owners can benefit from a dividend and receive new stock after an RS. Show me where it states a short position can be held without owning the security."
A RS is NOT a stock dividend.
"Stock dividends are similar to cash dividends; however, instead of cash, a company pays out stock. As a result, a company's shares outstanding will increase, and the company's stock price will decrease."
I am not going to disprove a negative and try to show that a stock can't be held through a RS. It's up to you to show that a short position can't be held through a RS. I wish you would stop making up things and posting them as facts. I don't know where you get your information from but I hope that no one here takes you seriously.
