Wednesday, August 8, 2007
The SEC has adopted amendments to Rules 200 and 203 of Regulation SHO, intended to further reduce fails to deliver in certain equity securities by eliminating the grandfather provision of Regulation SHO. The amendments also modify the close-out requirement for fails to deliver resulting from sales of threshold securities pursuant to Rule 144 and update the market decline limitation referenced in Regulation SHO.
The SEC also issued a release re-proposing amendments to Rule 203 of Regulation SHO, intended to further reduce fails to deliver in certain equity securities by proposing to eliminate the options market maker exception to the close-out requirement of Regulation SHO. In addition, the release proposes amendments to Rule 200 that would modify the long sale marking requirements of Regulation SHO to require that broker-dealers marking a sale as "long" document the present location of the securities being sold.