Subject: File No. S7-12-06
From: g j m, cpa
Affiliation: former stock loan rep

May 30, 2007

If broker A fails to receive shares, they can institute a buy-in two days (that's right, TWO DAYS) after the initial fail day.

Broker A (the receiving broker)must tell DTC (Depository Trust Company)to to send a notice of intent to buy-in to Broker F (the fail to deliver broker)

REG SHO is moot. It attempts to stop naked short selling by forcing a buy-in 10 days after the 3rd fail day.

DTC will force a buy-in in 2 days if Broker A Buys-in Broker F.

Stock Loan departments should be penalized for all fails. When you fail to deliver, you get an F for a day. This is real life, not a test. So assess monetary damages for fails and you might get someones attention.