Global Diamond Exchange, Inc. (GBDX)

[Lindy]

GBDX IN ROCKTOBER = STORM BREWING,,
Elimination of the grandfather provision. To restrict – indeed eliminate, the ability of market makers to
satisfy these investor needs will undoubtedly lead to less liquidity, greater volatility, and widening of spreads. Further, in certain instances, restricting bona fide market making in such a fashion could lead to upward price.
The new amendment would require that all grandfathered fails be closed-out within 35 settlement days from the effective date of the amendment and if a security becomes a threshold security after the effective date, all fails would need to be closed out within 13 consecutive settlement days.
The elimination of the grandfather provision will lead
to increased volatility in these securities, created by short
squeezes as individuals attempt to cover positions. Importantly, the elimination of the grandfather provision will negatively impact bona fide market making and the ability of market makers to provide
liquidity. For example, market makers who sell short thinly traded, illiquid stock in response to customer demand may encounter difficulty in obtaining securities when the time for delivery arrives.