RE:Christian Levine Lawyer on Cdn markets dated March 2023 If Lawyers are saying it ..and making cases out of it,
Therefore, we recommend the following to eliminate these forms of illegal activity.
1) Regulate the settlement system. Enforce a T+2 settlement on all trades with no exceptions. This will force everyone to borrow the stock prior to execution of the short sale so to timely deliver it and timely consummate the trade.
2) This includes market makers who are marking the shares long (when they are short) and posting multiple offers that are not real in their market making activities with no intention of ever covering the trades in the required time frame under the market making rules. This will force them to get the borrow to cover as they are currently required to do by law, but fail to do. Interestingly, this is what Europe appears to be implementing early next year.
3) Bring back the uptick rule so that stocks can’t be driven down relentlessly by the abuses listed above which will help with market structure and integrity. This rule was put in place for a reason and should never have been removed.
4) Implement a pre borrow requirement on all short sales.
5) Regulate the stock loan business to make sure over lending isn’t occurring which happens all the time. Impose large fines for this behavior if violated.
6) Never let cash account shares be borrowed in any manner. IIROC’s recent change to allow the borrowing of cash account shares was in our opinion done to cover the tracks of this abuse of prior lending of cash account shares that was happening on a large scale.
7) Put in place the same reporting requirements for short sales as currently in place for long positions. If a 10% beneficial ownership threshold is deemed appropriate, then have the same for requirements for short sales.
8) Spoofing and layering to drive stocks lower during short attacks has to be able to be tracked. Upgrade the systems and talent in house at the regulatory bodies to track this is a good start.
9) Transparency into the positions of all broker dealers must be implemented. It is astounding that in today’s age of required transparency that this already isn’t in place.
This should include the following: (a) Daily publication of total short sale volume; and (b) daily publication of all failed trades by broker. Should you have any questions, please feel free to contact
I even have mentioned this a couple of weeks ago about daily short volume publication...There is no excuse why it can't be done.