Subject: File No. 4-627
From: L. A. Sumn
Affiliation: Business

June 10, 2011

When will the SEC realize short trading poses a threat to the U.S. economy?

Other countries seem to recognize the danger.

Regulations outside of the United States
Several international exchanges have either partially or fully restricted the practice of naked short selling of shares. They include Australia's Australian Securities Exchange
Securities and Exchange Board
Japan's Tokyo Stock Exchange
SWX Swiss Exchange

Japan's naked shorting ban started on November 4, 2008, and was originally scheduled to run until July 2009, but was extended through October of that year. Japan's Finance
Sh#333ichi Nakagawa
Financial Services Agency

The Singapore Exchange

On May 18, 2010, the German Minister of Finance announced that naked short sales of euro-denominated government bonds, credit default swaps based on those bonds, and shares in Germany's ten leading financial institutions will be prohibited. This ban went into effect that night and was set to expire on March 31, 2011. On May 28, German financial market regulator BaFin announced that this ban would be permanent. The ban is effective July 27, 2010.

The International Monetary Fund issued a report in August 2010 saying that the German government's unilateral ban on some kinds of naked shorting succeeded only in impeding the markets. It said the ban did relatively little to support the targeted institutions underlying stock prices, while liquidity dropped and volatility rose substantially. The IMF said there was no strong evidence that stock prices fell because of shorting.