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Replies to post #18891 on Pulse Beverage Corp. (fka PLSB)
Regulation SHO also created the "Threshold Security List", which reported any stock where more than 0.5% of a company's total outstanding shares failed delivery for five consecutive days.
Regulation SHO[edit]
The SEC enacted Regulation SHO in January 2005 to target abusive naked short selling by reducing failure to deliver securities, and by limiting the time in which a broker can permit failures to deliver.[28] In addressing the first, it stated that a broker or dealer may not accept a short sale order without having first borrowed or identified the stock being sold.[29] The rule had the following exemptions:
Broker or dealer accepting a short sale order from another registered broker or dealer
Bona fide market making
Broker-dealer effecting a sale on behalf of a customer that is deemed to own the security pursuant to Rule 200[30] through no fault of the customer or the broker-dealer.[29]
To reduce the duration for which fails to deliver are permitted to sit open, the regulation requires broker-dealers to close out open fail-to-deliver positions in threshold securities that have persisted for 13 consecutive settlement days.[28] The SEC, in describing Regulation SHO, stated that failures to deliver shares that persist for an extended period of time "may result in large delivery obligations where stock settlement occurs."[28]
Regulation SHO also created the "Threshold Security List", which reported any stock where more than 0.5% of a company's total outstanding shares failed delivery for five consecutive days.
https://en.wikipedia.org/wiki/Naked_short_selling
