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Strategies & Market Trends : Zeev's Turnips - No Politics
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To: sylvester80 who wrote (36606)3/4/2002 12:41:31 AM
From: Cactus Jack  Read Replies (2) of 99280
 
syl,

By giving just 10 days notice of this type of change, which effectively has caused major houses NOT to take short sale orders until their computer systems are capable of complying with the new regulations with complete certainty, they have effectively stifled the vast majority of short sales for the immediate future, causing a massive short-covering rally.

From Softechie's link:

< But the brokerage executives complain of the speed at which the new rules are being introduced. Because the FSA has also been cracking down on short-sale violations-including punishing firms for minor clerical breaches-brokerage executives say the swiftness of their application has made all firms fearful of accidentally breaking the rules, and therefore reluctant to take short-sale orders. They say advance notice of two or three months would be required to smoothly prepare for the rule change.

Even the Tokyo Stock Exchange says it won't have its computer systems ready in time for the new rules. Spokesman Shuya Iimura says the exchange aims to have its system updated by the end of May or early June.

That puts the onus on the brokerage firms to make sure their trades comply with the rules. Traders say that even if they fully comply, and their emergency patches to their computer systems work flawlessly, the exchange could still process an order that winds up violating the new rules through no fault of the broker.>

jpgill
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