Replies to post #123304 on Bancorp International Group Inc (fka BCIT)

[glaszman]

i'm unable to find much on it. it's very sketchy:

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a google search? the second hit is the post i JUST made today...

that means the google bots are crawling all over the site today ;)

[mastaflash]

SEC makes the rules, so they have the say. Is my understanding.

[glaszman]

found this, it's not much help other than to (re)define the NSCC as an SRO:
(once again it's OCR program so typo's will happen)


The purpose of this proposed rule change is to modify NSCC’s Rules with regard to CNS Buy-Ins in an effort to harmonize the buy-in rules of the industry and to assist NSCC members in reducing their exposure related to buy-ins.

yeah, reducing exposure to major screw-ups


Technical Correction
In addition to modifying NSCC’s Rules and Procedures to reflect the above changes, NSCC will also make a technical correction to Procedure X, “Execution of Buy-Ins – CNS System.” The procedure states that members who receive CNS Retransmittal Notices and do not satisfy them assume liability for the loss, if any, which occurs as a result of the buy-in and that those members with the oldest short positions after the evening cycle on N+2 will first be held liable for an executed buy-in. Procedure X should reflect that it is the oldest short positions after the day cycle on N+2 that will first be held liable for an executed buy-in.

Implementation
If approved by the Commission, NSCC plans to implement these changes on a pilot basis open to all members on the later to occur of January 13, 2006, or within one week of the Commission’s approval of the proposed rule filing. The pilot will be limited to buy-ins of CNS eligible NYSE listed securities. NSCC anticipates that the pilot phase will be completed within thirty calendar days of implementation at which time buy-ins of all other CNS eligible securities will be permitted under these proposed changes. At that time the pilot will cease.

NSCC believes that the proposed rule change is consistent with the requirements of Section 17A of the Act5




http://www.rutherford.org/articles_db/commentary.asp?record_id=343

this rule change is prolly why some brokerages began instituting "sell-only" orders on alot of the penny stocks. they were under a buy-in order.

this seems to be in direct disagreement with the SEC's 1980requirement that the clearing agency is ultimately responsible... notice the date this was instituted: December 19, 2005 that would be just about the time the BCIT mess was becoming completely clear to the higher ups at DTCC...


here's another article, but it's not official in any way; it's written by buy-ins dotnet, which has their own interests to pursue:

Buy-in notifications are sent when a broker fails to deliver securities on time. The broker expecting the securities sends a buy-in notice to the broker that is failing to deliver, informing them that the broker failing to receive the securities will go into the market to buy them and hold the delivering broker liable for any price variation. Brokers are responsible for any difference between price of the original transaction and the price of the buy-in.

http://goliath.ecnext.com/coms2/gi_0199-4998904/SEC-Approves-NYSE-3-Day.html

[ohbull2000]

Burns is aware michael...get in touch eom