I have no problem with margins. I do have a serious problem with short selling. Not calls and puts either ... I prefer supply & demand not for someone to borrow my holdings and sell down my investment value. Will never like this tactic and the short selling is being attacked, which is probably why nothing has changed since the SEC opened it up for comment.
SEC has received a record number of comments from individual investors, numbering in “the hundreds.” They’re surprised, because they rarely receive many individual responses to such proposals, and the word is out that the issue of MMM is gaining their special attention.
The SEC action is encouraging to both individual and corporate victims of MM manipulation, but the truth is that, a slow, drawn-out, bureaucratic process lies ahead before anything happens.
“Although short selling serves useful market purposes,” the SEC proposal says, “it also may be used as a tool for manipulation. One example is the ‘bear raid’ where an equity security is sold short in an effort to drive down the price of the security by creating an imbalance of sell-side interest.
“Many people blamed ‘bear raids’ for the 1929 stock market crash and the market's prolonged inability to recover from the crash. Short selling was one of the central issues studied by Congress before enacting the Exchange Act, but Congress made no determinations about its permissibility. Instead, Congress gave the Commission broad authority to regulate short sales in order to stop short selling abuses.”
The proposed change would alter Rule 10a-1 of the Exchange Act to extend the disclosure rule to cover non-exchange stocks. Proponents of reform want the SEC to go a little further and place a limit of 10% on the amount of a given stock a Market maker can short.
Under the extension of Rule 10a-1, OTCBB stocks would be protected by the same rules the Commission applies now to exchange-listed stocks, rules intended to prevent “short selling at successively lower prices, thus eliminating short selling as a tool for driving the market down; and short sellers from accelerating a declining market by exhausting all remaining bids at one price level, causing successively lower prices to be established by long sellers.
“These objectives continue to be the foundation for Rule 10a-1,” SEC said. “They represent the Commission's goal to prevent short selling that could manipulate or depress the market for a security, irrespective of the intention of the short seller.”
I wont give up so I will just keep sending letters...
p2bAAAT |
