Why insanity? If I understand correctly, they want to fight naked shorting. If someone here is so inclined, and wants to send a public comment to the SEC, they should add two additional provisions. First, the to obligation to actually borrow shares for shorting should extend to all foreign brokers dealing with US securities. Second, to improve transparency, all short sales should at least be summarized at the eod, in a report of that day's short sale volume and the then true cumulative short position in each equity. Preferably, each transaction which involves a short selling (or short covering) should be so identified. The technology surely exist to do that. The only reason such prompt reporting is not carried on, is to give an undue advantage to market makers and specialists. If the administration truly wants to fight corruption in the markets, level the playing field and make that information available at once. If they already do that, they might as well report the specialists activities on a daily basis and not the current 14 days plus delay....
We tried to get a movement going on these issues sometime last year (Koikaze was leading the charge, but I fear nothing came out of it).
Nice to see seven years after I started my Don Quixotic war against the floorless bandits that the SEC is finally addressing tha issue.
03/13: (217509) (*COMMENT*) the insanity is, imo:
the requirement of written permission in advance, to short all stocks and indexes, even if on the NASDAQ national market, will make it very difficult if not impossible for short-term trades.
AND
"Consistent with the current SRO requirements, the proposed rule would require that the locate be made and annotated in writing prior to effecting any short sale, regardless of the fact that the seller's short position may be closed out by purchasing securities the same day."
AND
"The Commission is proposing an exception from these requirements for short sales executed by specialists or market makers but only in connection with bona-fide market making activities"
Just another way for the specialists & MMs to screw the little guy.
All "da boyz" market making activities are bona fide, no doubt ... as Martha Stewart well knows.
I fully agree with you on the need/desire for timely reporting. (*END*)
Hey, if you feel this is too much, comment. I think that most "day trading" is done electronically, in any event, and thus availability of borrowable shares, which you have to ascertain anyhow with your broker, can be done in the same transaction and accepting "electronic writing" as "writing".
03/14: (217590) (*COMMENT*) I do so much shorting, particularly of low-priced stocks, that I keep two additional brokers (Harris and Interactivebrokers) for no other reason. I have noticed that brokers take different approaches to "lending' shares. For example, Datek used to react immediately with a yes or no, leading me to believe that they were working off a list, but not actually looking for shares. Now that they are Ameritrade, they often do not react immediately, leading me to believe that they are actually looking for the shares.
If any brokers currently do what Datek used to do (that is, assume that some stocks are shortable w/o looking for shares), then the proposed rules would restrict short-selling at least a little.
BTW, Zeev, do you have any opinion on the possibility of squeezes in a number of heavily naked-shorted stocks when the new rules go into effect. I'm guessing that there will be enough warning for the naked-shorters to get out gradually in advance... (*END*)
I think that many of those "naked short" are backed by floorless, they can insist on conversion before such a squeeze were to happen. part of that, I think the regulation is teethless if it does not applies to brokers in foreign markets, just another fig leaf for the SEC to cover up their participation in the process of moving wealth from Mosis to the few that "know the name of the game"..... All they do is try and close the door on Mosis from being able to short these since as I have said before, shorting floorless is like shooting fish in a barrel.
Market Data 
Markets 
AI
