July 26, 2008
I write to urge the SEC to change the naked short selling rules as follows:
1) Elimination of the options market maker exception
2) More aggressive enforcement of current Regualtion SHO
3) Enactment of more stringent "locate" requirements of Regulation SHO
4) Increased transparency with regard to short selling and settlement failures, i.e. full and prompt disclosure of FTD's listed by broker dealer and by company
The key point is that shares that cannot be borrowed should not be allowed to be shorted. Although it is as simple as that, the SEC will likely have to implement these changes slowly to ensure orderly markets. Nonethess, slow but steady progress must start immediately to maintain investor faith in the US stock markets.
Thanks for your time and consideration in this matter.