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Biotech / Medical : Biotech Short Candidates

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To: tuck who wrote (156)	12/24/2001 8:44:17 PM
From: michael_f_murphy	Read Replies (1) of 897

Tuck, I believe that 1943 Securities law has the margin requirements for "US persons" (and therefore shorting) set by the Federal Reserve Board. This is covered in Regulation T. My understanding is that for the Reg T in effect now the security must trade in the secondary market for 30 days, among other things, before it is marginable and therefore shortable. The main FRB web site (www.federalreserve.gov) is a maze that I can't fight through to find the regulatory language. The more accessible NY Fed site (www.ny.frb.org) doesn't have enough detail on Reg T. Perhaps one of the securities lawyers can point to a primary source. As a secondary reference see for example: "With an IPO, you must wait at least 30 days after a security has been traded in the secondary market before the security may become marginable." ameritrade.com In any case your brokerage house may have rules no less strict than the FRB rules, if they apply. Note that FRB regulations only apply to "US persons" so foreign customers have different opportunities.

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