August 24, 2007
August 24, 2007
Ms. Nancy M. Morris, Secretary
Securities and Exchange Commission
100 F. Street, NE
Washington, DC 20549-1090
Re:Comments on Proposed Amendments to Regulation SHO
File No S7-19-07
Dear Secretary Morris:
The options market maker exception has become a tool of manipulation and must be eliminated to ensure a level playing field for public companies and shareholders. I support the SECs proposed elimination of Regulation SHOs options market maker exception and encourage the SEC to take the steps necessary to bring this about as soon as possible. To allow it to continue only prolongs the abuses now taking place each and every day.
I would agree that the elimination of the options market maker exception and the grandfather provision will strengthen Regulation SHO, yet these changes alone will in no way solve the problem that results in continued naked short selling and failures-to-deliver. The only way that will happen is for the SEC to:
A/ Impose in Regulation SHO a requirement of a firm location of shares to be borrowed before a short sale can be executed. That's exactly what short selling is and should be: FIRST borrowing shares that then can be sold at a later date.
B/ Enable complete transparency by requiring timely disclosure of the volume of failures-to-deliver shares of companies on the Regulation SHO threshold list.
The SEC should issue and complete promptly a notice of proposed rulemaking to implement these two critical components of effective Regulation SHO reform. These changes would not be difficult to implement. Any other changes are simply window dressing which will not stop the rampant abuse of naked short selling.