WE ALL NEED TO WRITE OUR REPS, SEC and anyone else that will matter regarding this.
This is a letter on Bob O'Brians page. It includes a sample letter for you to use if you need to. It's regarding paper certificates. I believe if we allow them to end paper certificates we are doomed. This is the letter I sent to the person who wrote to all SIFMA CEO'S Monday Aug, 20th.
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This message was sent to:
Noland Cheng
SIFMA Operations Committee Chair
Lawrence Morillo
SIFMA Operations Legal & Regulatory Sub-Committee Chair
To whom it may concern,
I don't know what your problem is with my wanting to hold my certificates in paper but what your stating to SIFMA is not correct and I intend to write them and tell them so. I had to pay the expense of obtaining my certificates not my brokerage and if that's how I choose to spend MY MONEY then it should be my business not yours. I find most of the market to be on the slimy side right now and if I keep my certificates in "STREET NAME" I'm not sure I own those shares. According to things I'm reading until I obtain my certificates the owner of record is the STREET not me. Well that's not what I want for my shares.
I suspect your part of the group that has a huge naked short position and figure if you can eliminate paper certificates you can eliminate your problem with regards to covering these shares. I think they should eliminate electronic trades after what we have discovered and demand that everyone hold their certificates in paper. And if we don't do this at least when a shareholder owns stock it should be listed in that individuals name not the street name that way we might be able to know we actually have our shares.
I just want you to know that I don't trust what should be the place where we should have integrity anymore. You have stripped yourselves from that by all the corruption that's being discovered in our markets. It's too bad those who should have been held to a high degree of honestly is found to be a bunch of slimy low life crooks. It saddens me to have to write this letter but what your proposing is just another ploy to create more fraud.
Sincerely,
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Which was my reaction to this letter posted here.
thesanitycheck.com
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This was sent to all SIFMA CEO's on Monday, August 20, 2007.
SIFMA <distribution1@sifma.org>
08/20/2007 04:17 PM
To "lmorillo@pershing.com" <lmorillo@pershing.com>
cc
Subject The phasing out of stock certificates and the Direct Registration System
August 20, 2007
Dear SIFMA Member Firms:
There are 250 million reasons to eliminate physical certificates! Based on an industry survey, the costs to maintain, process, provide safekeeping, and mail physical certificates amount to over $250 million annually... Approximately $49 million of this total cost relates to lost and stolen certificates, and is primarily borne by individual investors. Many other participants in our industry have taken steps to stop using physical certificates, including our stock exchanges and several broker-dealers. It is now time for the entire broker-dealer community to step up to the plate and help achieve the goal of eliminating physical certificates.
With this letter, we are asking all SIFMA member firms to decide to discontinue providing physical certificates for Direct Registration System ("DRS") eligible securities by January 1, 2008. This date is consistent with that set by the primary exchanges in recent rule changes requiring that all exchange-listed issues be eligible for DRS by January 1, 2008.
The overall costs and risks associated with holding physical certificates make it imperative to utilize viable alternatives for evidencing securities ownership. The primary alternatives that are available include the DRS for customers that choose to be registered on the books and records of the company, or for customers to hold their positions at a bank custodian or broker-dealer ("street name").
The DRS, which was developed by DTC and transfer agents in the late 1990s, offers automated linkages between the record keeping systems maintained by transfer agents for corporate issuers and those recordkeeping systems maintained by broker-dealers and banks for their customers. DRS thereby enables a shareholder or their registered representative, for example, to electronically direct the movement of a position in a security from an issuer’s transfer agent to the shareholder’s account at a broker-dealer of their choice and eliminates the negotiability document requirement for our customers. In addition, firms can easily choose DRS as a default setting within their vendor systems (i.e. Broadridge, Sungard, Thomson, etc.)
Unfortunately, even though DRS is available for many securities, many DTC participants either are not aware of it or have chosen not to use it; instead, they continue to provide physical certificates to customers. This practice results in unnecessary costs and risks for investors. For example, from 2004 to 2006, the total cost to member firms for obtaining physical certificates through DTC – despite DRS being available – was $25.9 million. In 2007, we are looking at adding another $10 million to that total, and DTC has advised its member firms that these fees will increase still further in 2008. In addition, today almost 75% of physical certificates deposited by broker-dealers and bank custodians at DTC were issued within the last six months of the deposit date. What this means is that we are providing physical certificates to our customers only to have them returned in a short period of time. This doesn’t make sense and just results in unnecessary expense and added risk.
It is critical that we all get the word out regarding the benefits of using DRS or holding positions in street name. SIFMA plans to help do so through an extensive education program for investors, sales representatives, operations management, transfer agents and related vendors. Hopefully, this program will assist SIFMA member firms in meeting the recommended January 1, 2008 date for using DRS for eligible securities.
We all know that the goal of the securities industry is to provide our customers with products and services for asset growth and to meet their financial needs. However, we strongly believe that a parallel goal should be to not perpetuate the use of physical certificates, as it has no bearing on investors’ account performance and just adds unnecessary expenses and risks for these individuals. As such, we urge you to discontinue providing physical certificates for DRS eligible securities by January 1, 2008 and discuss this important step with your sales representatives and operations managers.
Thank you for your consideration of this request, and we look forward to hearing from you on this matter. If you have any questions or require additional information, please do not hesitate to contact John Panchery, SIFMA Managing Director, at: 212-618-0559 or jpanchery@sifma.org.
In addition, you can also view more information on this subject by visiting SIFMA’s Paperless Web Page at: sifma.org.
Sincerely,
Noland Cheng
SIFMA Operations Committee Chair
Lawrence Morillo
SIFMA Operations Legal & Regulatory Sub-Committee Chair
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In case the link doesn't open here's what it says.
A lot of stuff happened this last week.
A study came out that showed that the majority of Wall Street would commit a felony if they thought they could get away with it. Wow. What a newsflash. Next thing they will say is that the majority of hookers will steal your wallet if they thought they could get away with it.
Huh.
And this is the succinct reason that self-regulation is a farce. The MAJORITY of those expected to police themselves are crooks. Seems pretty straightforward to me. Crooks who would break the law, gladly, if they thought they could get away with it are not capable of the honesty required to self-police.
On that topic, I note that the professional association of the crooks (SIFMA) is now advocating eliminating paper certificates, which are the only proof the individual shareholder can get that he actually wasn't screwed by the crooks. That also isn't too hard to figure out - they want to do away with any mechanism that would show them counterfeiting shares. Simple. Question is, is there anything we can do about it, other than pulling every last dime out of the market, never to return?
The credit situation continues to deteriorate. As predicted, we are just now understanding the level of damage that unregulated hedge funds, holding questionable assets they then leverage by 10 or 20 or higher, can cause when the assets fall out of bed and lose value. Synopsis: It ain't pretty, and it is going to get much worse before it gets better. Call it a hunch.
The SEC's decision to damage the investor so Wall Street privateers can run roughshod over the equities market (by eliminating the uptick rule) has resulted in daily bear raids on the markets, which seemingly everyone on the planet except for the experts that weighed in for eliminating it figured out. So we now have a virtually completely unregulated market, in the sense that few regulations that would stop massive market manipulation exist, and those that do, are routinely ignored.
Some, like the market maker exemption, which allows options market makers to naked short limitless numbers of shares, directly damaging equity investors, are being examined by the SEC, with a sort of credulous, "Is that bad, to allow options speculators to destroy the equity investors' market, thereby directly harming investors, in direct contradiction to the SEC's mandate?"
The following is a letter I suggest everyone send to the SEC, via their website request for comment, on that exemption. It has my complete and total endorsement, so feel free to copy it verbatim, or to modify it as necessary.
You can submit it painlessly and electronically here:
sec.gov
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August ___, 2007
Ms. Nancy M. Morris, Secretary
Securities and Exchange Commission
100 F. Street, NE
Washington, DC 20549-1090
Re: Comments on Proposed Amendments to Regulation SHO
File No S7-19-07
Dear Secretary Morris:
I appreciate the opportunity to provide comments on the Commission’s proposed amendments to Regulation SHO. I am a shareholder of a company that has appeared on the Regulation SHO threshold list day after day after week and month after year.
I support the Commission’s proposed elimination of Regulation SHO’s options market maker exception and encourage the Commission to complete the administrative steps to accomplish this change as quickly as possible (e.g., by year’s end). The options market maker exception has been a well known tool of manipulation and must be eliminated promptly to ensure a level playing field for public companies and shareholders.
I commend the Commission’s recent action to strengthen Regulation SHO through the elimination of Regulation SHO’s grandfather provision. I am also pleased that over the past several months that Chairman Cox has personally spoken about the abuses of naked short selling and the need to end this manipulative practice. However, I remain concerned that, despite the Commission’s recent efforts and Chairman Cox’s public comments, these abuses continue.
While the elimination of the options market maker exception and the grandfather provision will significantly strengthen Regulation SHO, these changes alone will not adequately solve the problem that results in continued naked short selling and failures-to-deliver. I request that the Commission (1) impose in Regulation SHO a requirement of a firm location of shares to be borrowed before a short sale can be executed, and (2) enable transparency by requiring timely disclosure of the volume of failures-to-deliver shares of companies on the Regulation SHO threshold list. The Commission should issue and complete promptly a notice of proposed rulemaking to implement these two critical components of effective Regulation SHO reform.
Sincerely,
[Name]
[Address]
cc:Christopher Cox, Chairman, U.S. Securities and Exchange Commission
Paul S. Atkins, Commissioner, U.S. Securities and Exchange Commission
Roel C. Campos, Commissioner, U.S. Securities and Exchange Commission
Kathleen L. Casey, Commissioner, U.S. Securities and Exchange Commission
Annette L. Nazareth, Commissioner, U.S. Securities and Exchange Commission
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