The Securities Industry and Financial Markets Association (SIFMA), after reviewing the Securities and Exchange Commission’s (SEC) amended order on its short-selling emergency order, called these steps “essential.”
“These clarifications will help ensure the emergency order avoids market disruption and preserves liquidity, and instead targets rumor-mongers and others who unlawfully manipulate stock prices. SIFMA fully supports SEC enforcement action against individuals engaged in illegal market manipulation. The guidance is essential for separating legitimate market makers from those who may try to act illegally,” said Ira Hammerman, SIFMA senior managing director and general counsel. “We appreciate the SEC’s efforts to address investor and industry concerns since the announcement was made Tuesday.”
The amended order provides:
-An exception from the order’s pre-borrow requirement for market makers selling short in connection with bona-fide market making including stock market makers and specialists, options market makers and specialists, and block positioners. The settlement date delivery requirement still applies to these market makers.
- An exception for short sales of certain restricted securities (affected pursuant to Rule 144 of the Securities Act of 1933) to make the order consistent with Reg SHO, which will facilitate orderly settlement.
- An exception for sales by an underwriter or any member of a syndicate participating in the securities listed in the order.
