October 11, 2007 - Elimination of Grandfather Provision of Regulation SHO - The SEC has amended Regulation SHO to eliminate the grandfather provision effective October 15, 2007 (SEC Rule 203(B)(3)(i).1 In order to accommodate the transition, market participants that have any grandfathered fails in a threshold security as of the effective date will have 35 settlement days to close out. If the position is not closed out within those 35 days, the clearing firm and the broker-dealers for whom it clears may not accept any short sale orders or effect 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 position. This 35-day period is a one-time phase in period. If a security becomes a threshold security after the effective date of the amendment, any fails (whether established before or after the threshold date) would be subject to the 13-day close out requirement.
I am only expressing my personal opinions or repeating public information from SEC filings or media outlets-which may or may not be correct. Do your own investigating before investing!
