September 7, 2014
SECURITIES AND EXCHANGE
COMMISSION
[Release No. 34–72444; File No. SR–FINRA–
2014–025]
Self-Regulatory Organizations;
Financial Industry Regulatory
Authority, Inc.; Notice of Filing of a
Proposed Rule Change To Adopt a
Supplemental Schedule for Inventory
Positions Pursuant to FINRA Rule 4524
(Supplemental FOCUS Information)
proposed rule change to adopt a supplemental schedule for inventory positions pursuant to FINRA rule 4524 (supplemental FOCUS information)
these FOCUS reports aggregate of all broker/dealers should be combined to produce an actual short position of all broker/dealers in every symbol.
i do not know why the public gets inaccurate information from the exchanges on a daily basis.
http://regsho.finra.org/regsho-Index.html
this website frequently underreports trading volume when compared to trading volume reported by the exchanges. i do not know why this is. the exchanges should be forced to explain this underreporting. as an example, DSCO shares are reported by several facilities but always the shares do not add up to the daily trading volume reported on level 2 or by the exchange.
if the reg. SHO volume is underreported because the daily trading volume is inaccurate, then the reg SHO list is inaccurate. compare the FOCUS reports on each symbol with the short interest reported by NASDAQ, for instance, and you will see that DSCO (as an example) is wildly underreported.
apparently the exchanges allow "anonymous transactions" that contribute to this problem. this violates transparency and makes regulatory agencies have a more difficult time tracing transactions. this also makes reports inaccurate. and brokers that agree to accept these IOUs on behalf of their buying customer need to have at least some idea of the # of shorted shares that should be bought in.
please note the reporting deadlines, 20 days after the end of the month. this would mean that any short position by any broker should already be cleared by the rules in the stock market. so no current position would be harmed. however, i also note that the reporting deadline is much too generous. i think that if a broker deceives buyers by offering IOUs instead of shares of stock, there should be a daily report of the aggregate of these trades. this report should be at the end of the day. unfortunately, September 2014 Reg SHO Daily Files is not such a report because the # of shares reported is wildly inaccurate.