One Step Ahead

[perc]

SEC Delays Short Sale Pilot Until May 2005

BUT NOT TO WORRY

says George Burns at Canuck's board, who thinks
that the parts of the SEC that are being delayed until May 2005 will
NOT effect CMKX.

--- In [e-mail], willywizard2 <no_reply@y...>
wrote: http://tinyurl.com/6m8xz

SEC Delays Short Sale Pilot Until May 2005

11/30 2:58P (DJ) +DJ SEC Delays Short Sale Pilot Until May 2005

Story 6777 DJ SEC Delays Short-Sale Pilot Program Until May 2005

WASHINGTON (Dow Jones)--An experiment in lifting short-sale
restrictions for some stocks, set to begin in January, will be
delayed until May, the Securities and Exchange Commission announced.

The SEC had approved the pilot program in July, as part of
Regulation SHO, a broader package of reforms involving short sales.
The pilot program was to begin on January 3 but, under an order
approved Tuesday, the SEC agreed to delay it until May 2. The
experiment will run through April 2006, the SEC announced.

All other terms of the pilot project remain the same, and all other
provisions of Regulation SHO will take effect on January 3, as
planned, the SEC said.

Short selling involves sales of borrowed stock. Short sellers must
replace the shares at a later date, and they profit if the stock
price declines in the interim.

-By Judith Burns, Dow Jones Newswires; 202-862-6692;

[e-mail]

http://tinyurl.com/6m8xz

___________________________________________

Comments on Proposed Rule: Short Sales

[Release Nos. 34-48709; File No. S7-23-03]

http://www.sec.gov/rules/proposed/s72303.shtml

___________________________________________

I hope that this does not delay CMKX Lawyer D Roger Glenn's
timetable for repairing the share structure.

I am frankly not sure whether it is bad news or not.

I would welcome your comments.

It is times like this when I sorely miss zen's input.

jawz_2020
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burns says @ http://tinyurl.com/6op7o

Again... that part of SHO has nothing to do with CMKX (that part is
202T that got the delay). All major portions still apply to our
situation. (203) Please read the rule.

http://www.sec.gov/rules/final/34-50103.htm
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and on another thread: "Lost faith = Imminent Run"
http://tinyurl.com/3lweg

BY BURNS:
Only the pilot test which had nothing to do with anything that would
effect CMKX was pushed back until May. The rest of SHO which could
effect CMKX will still be enforced on the original date.

Suggest you read SHO.

oh yea.... and the compliance date is the 3rd of Jan.

Here is the link:

http://www.sec.gov/rules/final/34-50103.htm

PDF version is easier to read and print IMO

http://www.sec.gov/rules/final/34-50103.pdf
___________________________________________________________________

Please explain the SHO rule in layman's terms
http://tinyurl.com/4bedc

This might help:
http://www.sarbanes-oxley-forum.com/

Boiled down to it's simplest form, it says that a broker/dealer can
NOT sell a security unless he has already located the underlying
security. It also says that an equity may only be loaned out ONCE.
This is the part that has the teeth.
Part 203(b)(3)(iii)

http://www.sec.gov/rules/final/34-50103.pdf

# If a participant of a registered clearing agency has a fail to
deliver position at a registered clearing agency in a threshold
security for thirteen consecutive settlement days, the participant
and any broker or dealer for which it clears transactions, including
any market maker that would otherwise be entitled to rely on the
exception provided in paragraph (b)(2)(iii) of this section, may not
accept a short sale order in the threshold security from another
person, or effect a short sale in the threshold security for its own
account, without borrowing the security or entering into a bona-fide
arrangement to borrow the security, until the participant closes out
the fail to deliver position by purchasing securities of like kind
and quantity;

AND THIS IS FUN:

b. Bona-Fide Market Making
We are adopting the proposed exception from the uniform ``locate''
requirement, as Rule 203(b)(2)(iii), for short sales executed by
market makers, as defined in Section 3(a)(38) of the Exchange Act,66
including specialists and options market makers, but only
connection with bona-fide market making activities.67 Bona-fide
market making does not include activity that related to speculative
selling strategies or investment purposes of the brokerdealer
and is disproportionate to the usual market making patterns or
practices of the broker-dealer in that security. In addition, where
a market maker posts continually at or near the best offer, but does
not also post at or near the best bid, the market maker's activities
would not generally qualify as bona-fide market making for purposes
of the exception.68 Further, bona-fide market making does not include
transactions whereby a market maker enters into an arrangement with
another broker-dealer or customer in an attempt to use the market
maker's exception for the purpose of avoiding compliance with Rule
203(b)(1) by the other brokerdealer
or customer.69
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by whetstone on Canuck's:

I am reading the reg now and have found nothing that omits the
pinks. If someone has a link to something that leaves the pinks out
of reg SHO please post it. So far the reg keeps saying "all
equities". Thanks

I found this in a footnote. Bottom of page 11.
http://www.sec.gov/rules/final/34-50103.pdf

86 Some stocks that are quoted in the Pink Sheets are not reporting
issuers, and thus there is not a readily available means to
determine the total shares outstanding in such securities. If,
however, we incorporate non-reporting issuers that have aggregate
fails in excess of 10,000 shares, only an additional 1% of all
securities would be added. These securities will not be subject to
the additional requirements imposed upon threshold securities,
although broker-dealers effecting short sales in these securities
are subject to the locate requirements of Rule 203(b)(1).
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by ssiriuscmkx:
Found what I was talking about. It was from Sterlings post (3 cont
at the bottom). http://tinyurl.com/3tcuc
"The ultimate goal is to force the MMs to trade CMKX correctly once
news of a huge magnitude is released since there will be nothing for
the MMs to cover since they will be given a clean sleight from
Regulation Sho when and if it ever kicks in. You must also be a
fully reporting company trading on the OTCBB before your case is
even considered too."
_________________________________________________________________

Comments on Proposed Rule: Short Sales

[Release Nos. 34-48709; File No. S7-23-03]

http://www.sec.gov/rules/proposed/s72303.shtml

___________________________________________