Replies to post #60023 on DD Support Board and Research Team

[BigBake1]

This has been explained a thousand time already, almost all OTC securities were never qualified to be in the program in the first place, contrary to the bullshit conspiracy theories thrown around due to sheer ignorance. This ridiculous idea that some form of covering is occurring since the SBP will no longer be available is pure conspiracy bullshit and ignores the real reason outlined in documents. The program has seen consistent decline in use year over year due to new liquidity available in the markets. That is a fact and that is the reason for the termination of the program.

The ignorance surrounding the great conspiracies that it was a source of Abusive NSS have been debunked a thousand times over,besides the fact that OTC securities did not qualify, exchange listed securities that did qualify were clearly explained by the SEC:

Question 7.2: Does NSCC's stock borrow program ("SBP") create "counterfeit shares"?

Answer: The SBP was implemented in the late 1970s to allow NSCC to satisfy its members' priority needs for stocks that they do not receive because of fails. It is governed by NSCC rules approved by the Commission. Under the SBP, NSCC uses shares voluntarily made available to the SBP by some of its members to complete deliveries to members that did not receive their securities on settlement day. The SBP moves securities that are actually on deposit at DTC from the lending member to the NSCC member who did not receive securities. NSCC then records the lender's right to receive the same amount of shares that it loaned just as if the lender had purchased securities but not received them (i.e., the member lending the securities replaces the member receiving the loaned securities in the CNS system). The lending and delivery of shares through the SBP, however, does not relieve the member that has failed to deliver from its obligation to deliver securities.

The shares loaned by NSCC members for use in the SBP must be on deposit at DTC and are debited from members' accounts when the securities are used to make delivery. Once a member's shares are used for delivery to another member, the lending member no longer has the right to sell or relend those shares until such time as the shares are returned to its DTC account. Accordingly, NSCC's SBP does not create "counterfeit shares." In fact, the program facilitates the delivery of securities to buyers while maintaining the obligation of the sellers to deliver securities to NSCC. This outcome is consistent with the NSCC's obligation to facilitate the prompt and accurate clearance and settlement of securities transactions and in general to protect investors and the public interest.

The recent volume spike in the OTC is directly attributed to these "pot" stocks and the promotional activities surrounding them. FINRA issued a warning in January concerning such schemes in preparation of such renewed interest in promotional schemes in their markets.

[janice shell]

No, not at all. Stocks trading under a dollar were never eligible for the Stock Borrow Program.