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Strategies & Market Trends : Rande Is . . . HOME

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To: Rande Is who wrote (55047)	9/28/2001 8:44:17 PM
From: Ga Bard	Read Replies (1) of 57584

Why can't the SEC follow suit for us here in America. The Securities and Exchange Commission and the Colombo Stock Exchange took the first positive steps towards introducing short selling to the Colombo market last week. As an initial step, the CSE and the SEC have formed a joint committee to make recommendations for the lending and borrowing of securities to facilitate short selling. Short selling gained its notorious fame after Malaysian President Mahathir Mohamad "naked short selling" a criminal offence punishable by death to save the Malaysian Stock Exchange from an agonising death caused by speculatvie naked trading. Short selling is a speculative practice where market players enter into contracts to buy or sell shares at pre-determined prices, without actually holding the shares. The type of short selling that is likely to be introduced to Colombo is short selling coupled with lending and borrowing. This will enable long term investors to lend the shares to their brokers, who in return will lend the shares to interested parties to short sell. SEC feels that this is a safer method of introducing short selling, rather than permitting naked short selling. Brokers will enter into contracts with both the lender and the borrower, to ensure the terms and conditions of repayment and time period. Both the lender and the broker will earn a fee from the transaction and the borrower will provide collateral against the borrowed stock. The contract can also include dividends and bonuses to be held in favour of the actual owner of shares. Notice this is a 3 way negotiation and not the way our system is set up. Why is it American long term investors are always penalized? "NO OWN - NO SELL" Petition: petitiononline.com Proud To Be An American Against Terrorism & Its Propaganda! :=) Gary Swancey

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