Dear Friends,
Betweennow and Monday, February 28th be prepared for panicked short sellerswho cannot make delivery to try every trick in the book to buy backtheir short positions.
The following is information from Dr. Jim Decosta:
Here is the URL:
https://www.finra.org/Industry/Regulation/RuleFilings/2010/P121892?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+FINRARuleFilings+(FINRA+Rule+Filings)
Quote:There’s 3 new laws gaining attention in the NSS market reform arena:FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins foropen delivery failures FINALLY applying to shares of non-reportingcorporations. FINRA 2010-043, also starting on 2/28/11 reinstates the“short sale exempt” (SSE) marking requirements for trade reporting andthe OATS system. Those MMs accessing the bona fide MM exemption fromexecuting pre-borrows or “locates” before admittedly naked short salesmust now FORMALLY acknowledge the accessing of that universally-abusedexemption. Being that these trades are theoretically being made to“inject liquidity” then the excuse to hide the related trade data fromthe public’s eyes goes out the window. You can’t have it both ways andclaim the bona fide MM exemption and later claim that the related tradedata needs to be kept secret because it might reveal a “proprietarytrading strategy”.
Trulybona fide MMs that are able to legally access that universally-abusedexemption cover their naked short position on the next downtick aftertheir short sale when buy side liquidity is in need of being ejected asshare prices fall. The 3rd new rule which is in effect now states thatthe offers and bids that MMs post must be of approximately the samesize. No longer can the offers be of 1 million shares and the offsettingbid good for the minimum 5,000 shares.
Theverbiage in 4320 is especially well done as it FINALLY puts theclearing firms that aid and abet this crime wave on the spot. With theFFETF, which is made up of 25 different agencies, now on the scene thetransparency has increased markedly. You can imagine how critical thelack of transparency is to a crime involving selling nonexistentsecurities and then refusing to ever deliver that which you sold AFTERbeing allowed access to the funds of the investor being defrauded.
Here are the links to the rules SR-FINRA-2010-028 and SR-FINRA-2010-043:
www.finra.org/Industry/Regulation/RuleFilings/2010/P121522
Notice the part I marked in bold in the quote above:
"FINRA 4320 goes into effect on 2/28/11. It mandates 13 day buy-ins for open delivery failures FINALLY applying to shares of non-reporting corporations."