July 9, 2014
3. Capital Charge
As discussed above, Rule 15c3-1 requires a broker-dealer to take a capital charge for short securities differences that are unresolved for seven days or longer and for long securities differences where the securities have been sold before they are adequately resolved.
i am quite disturbed that the SEC does not require securities to be bought in within market deadlines, instead extending the market deadlines for a buy-in. when does the SEC require that short sales be bought in? since the SEC does not require that securities be borrowed before shortselling, then the SEC allows naked shortselling. to extend market deadlines for shortselling, then the SEC has decided to allow the shortselling/capital outflow from the market to the detriment of the investors and companies that form capital.
i don't think there is any excuse for this. this is contrary to the mission statement of the SEC.
well, maybe the SEC can fine errant brokers in the stock market and everything will be fine - except for the investors damaged by this outrageous behavior.
i have little faith that the SEC will regulate the market. while the SEC is charged with enforcement, it appears to me that enforcement is so spotty as to be ineffectual. people are not prosecuted, securities licenses are not at risk, and companies pay a small fine so that they can keep on behaving in the same way.