That is really one of the critical questions that we all need to do some DD on I think. I have been pouring over the DTCC documentation on their website but still have not found an exact ruleset which stipulates the amount of time they would have to deliver shares. The situation is thus, IF there are zero faux shares on the MM books (maybe Friday they were all able to cover those phony shares with real shares that they bought) THEN the real shares that the clients have shorted CAN remain short until day 3 (I think), however IF there are still faux shares shorted out there and in a large number of them THEN every share that is on their books as a short which do not exist, they will need to settle at EOD Tuesday at the closing bell therefore in that scenario they would absolutely positively have to have bought some real shares to cover those phony shares, I do not think they can wait 3 days in that case. When you think about it, for non-ST settled shares AND they are large clients which may use a clearing route that is only one day, I am guessing those will be available to liquidate on Wed, but for retail investors who have a brokerage using settlement services firm that use a three day settlement period they will have to wait I guess until either Thur or Friday to sell shares. It is all a bit confusing.
I myself had the question, for those with settled shares and able to sell on Tuesday, if they put a sell order out there that fills, minutes after, is that client still able to keep selling (if he still has some sort of position), or is it going to be the case that after he sells some portion of his position, now his shares are pending and so is blocked from further trading for that day??????
Anyone who can give a more detailed view of the timing and ruleset for clients to be able to liquidate in this GTCC lock scenario, please feel free, thx.
GLTA!
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