Rim Semiconductor Company (fka RSMI)

[iOwnSomeNVEI]

NASD Regulation 3370 Goes Into Effect Today: Illegal Naked Shorts on the Run
http://www.otcjournal.com

For those of you who have been following this issue, I have an update. If you see some Bulletin Board stocks begin to trade a little crazy, it may be the result of this new regulation.

http://www.nasdr.com/pdf-text/0421ntm.pdf

I have reported on this issue in four previous editions, and I have learned a new rule went into effect today which appears to be the answer to a problem which has plagued the microcap market for many years.

Illegal naked short sellers have been able to funnel trades into US markets through Canadian Brokerage firms to the detriment of many investors. US brokerage firms are regulated by both the SEC and the NASD. Canadian firms are not.

NASD Regulation 3370, entitled "Affirmative Determination Requirements" places the responsibility on the US Brokerage firms to determine if sellers who are non NASD member (coming from outside the US) can actually deliver the securities they are selling. If they cannot, the trade cannot be executed on their behalf.

The new NASD rule went into effect today, and rumor has it that illegal naked short sellers are scrambling to find a home for their positions. I don't believe they will be forced to cover existing shorts, but for future trading the loophole has been closed. Look for this to have a very positive effect on many microcap stock values.