What is Rule 204?
Rule 204 – Close-out Requirement. Rule 204 requires brokers and dealers that are participants of a registered clearing agency to take action to close out failure to deliver positions. Closing out requires the broker or dealer to purchase or borrow securities of like kind and quantity.
What is Reg SHO list?
A threshold list, also known as a Regulation SHO Threshold Security List, is a list of securities whose transactions failed to clear during the previous trading days. Threshold lists are published in accordance with regulations set out by the Securities and Exchange Commission (SEC).
What is bona fide market making?
The OIP quotes the SEC’s statement in 2008 that “a market maker engaged in bona-fide market making is a ‘broker-dealer that deals on a regular basis with other broker-dealers, actively buying and selling the subject security as well as regularly and continuously placing quotations in a quotation medium on both the bid …
What is SEC Regulation SHO?
Regulation SHO is a 2005 SEC rule that governs short selling. The regulation introduced the “locate” and “close-out” requirements aimed at curtailing naked short selling.
What is t35 rule?
With respect to “delivery against payment” transactions, the broker-dealer has up to 35 calendar days (T+35) to obtain payment “if the security is delayed due to mechanics of the transaction and is not related to the customer’s willingness to pay.”
What are short exempts?
“Short exempt” refers to a short sale order that is exempt from the price test of the Securities and Exchange Commission’s (SEC) Regulation SHO. The current regulation allows for a comparatively small number of restrictions, and within those restrictions are an even smaller fraction of exceptions to that rule.
What is t35 settlement?
With respect to “delivery against payment” transactions, the broker-dealer has up to 35 calendar days (T+35) to obtain payment “if the security is delayed due to mechanics of the transaction and is not related to the customer’s willingness to pay.” FINRA Rule 4210.
Are coordinated short squeezes illegal?
Short squeezes are illegal. Any brokerage that knowingly allowed a short squeeze to continue without taking action, could have potentially massive legal liabilities.
Do market makers need to be regulated?
Market making requirements A registered Regulated Market Maker is required to provide firm quotes in at least one instrument during 50 percent of daily trading hours on a monthly average. The required quotation time will exclude opening and closing auctions, volatility interruptions and exceptional circumstances.
What is regulation ATS?
An alternative trading system (ATS) is a trading venue that is more loosely regulated than an exchange. The most widely used type of ATS in the United States are electronic communication networks (ECNs)—computerized systems that automatically match buy and sell orders for securities in the market.
What is Reg T settlement?
Regulation T is a collection of provisions that govern investors’ cash accounts and the amount of credit that brokerage firms and dealers may extend to customers for the purchase of securities. The remaining 50% of the price must be funded with cash.
What is regulation M?
What is Regulation M? Regulation M is intended to protect the trading markets by prohibiting activities by distribution participants that could manipulate the market for a security that is the subject of an offering.