November 19, 2008
I suffered through the nearly daily changing of the rules regarding short-selling of the securities protected as "financials" (I use the term in quotes deliberately as to call some of the quarantined securities financials was a stretch, at best). Now I have been victim to a part of the rule that before today, I was unaware of, the requirement to deliver borrowed, yet undelivered securities by the start of the next trading day.
I, as a trader, find that ridiculous. If your internet was to stop the financials from further falling, you have obviously had no success: the market values them at whatever the market deems appropriate. All other transactions close on a T plus three settlement; I find no reason that buy in of shorted shares should be any different. To receive no notice of a buy-in until after it has happened due to a broker's attempt to comply with this rule is both unnecessary and unfair.
As a taxpayer, I feel that the SEC's time would be much more wisely spent on other items. To continually artificially protect a sector of the market is ridiculous. Naked short selling is one issue: some of the time restrictions on delivery of borrowed shares is a totally different issue.
Santa Rosa Beach, FL