SHORT SQUEEZE Coming???
Amendments to Regulation SHO- Effective Date: October 15, 2007.
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'). The amendments are intended to further
reduce the number of persistent fails to deliver in certain equity
securities by eliminating the grandfather provision of Regulation SHO.
In addition, we are amending the close-out requirement of Regulation
SHO for certain securities that a seller is ``deemed to own.' The
amendments also update the market decline limitation referenced in
Regulation SHO.
DATES: Effective Date: October 15, 2007.
3. Adoption
After careful consideration of the comments, we are adopting the
amendment to eliminate the grandfather provision as proposed. As
adopted, the amendment eliminates the grandfather provision from
Regulation SHO and amends Rule 203 to require that all fails to deliver
in threshold securities be closed out within either 13 consecutive
settlement days or, in the case of a previously-grandfathered fail to
deliver position in a security that is a threshold security on the
effective date of the amendment, 35 consecutive settlement days from
the effective date of the amendment.\53----------------------------------------------------- ----------------------
\53\ In addition, similar to the proposed amendment and Rule
203(b)(3)(iii) of Regulation SHO, as originally adopted, if the fail
to deliver position persists for 35 consecutive settlement days from
the effective date of the amendment, the amendment will prohibit a
participant, and any broker-dealer for which it clears transactions,
including market makers, from accepting any short sale orders or
effecting further short sales in the particular threshold security
without borrowing, or entering into a bona-fide arrangement to
borrow, the security until the participant closes out the entire
fail to deliver position by purchasing securities of like kind and
quantity. For those fails to deliver not subject to the 35
consecutive settlement day phase-in period, Rule 203(b)(3)(iii) of
Regulation SHO, as originally adopted, will apply to fail to deliver
positions in threshold securities that persist beyond the 13
consecutive settlement day mandatory close-out requirement.
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DO WE HAVE THE MAKINGS OF A SHORT SQUEEZE ???
