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Pastimes : Georgia Bard's Corner -- Ignore unavailable to you. Want to Upgrade?

To: Jim Bishop who wrote (7527)	11/23/1999 12:18:00 AM
From: Ga Bard	Respond to of 9440

Hey look what was on the BOBZ thread. By request, I'm reposting this here. Proposed SEC changes ... details inside. Voyager voyager@ragingbull.com -------------------------------------------------------------------------------- The SEC has proposed a new rule to abolish naked shorting of OTC:BB stocks. If this proposal is adopted, then any shorting that is done, would have to comply with the same rules that the current big board NASDAQ stocks have. Even if you don't currently own any OTC:BB stocks, you need to at the very least, read the bottom of this message, as there is something that the SEC is proposing regarding the uptick rule, that could possibly IMHO, affect ALL stocks. Check it out ... IMHO, it's about time the SEC is doing something about this. There is a proposed rule by the SEC to END Naked Shorting on the OTC:BB stocks. sec.gov and the specific rule ... sec.gov and the comments to date that the SEC has received ... sec.gov this is the web page with e-mail address that people can write to with comments about the new rule... sec.gov A writer would need to be sure to include the proposed rule number, like in the examples of those who have already written here: sec.gov I hope that this is something that we as Investors will indeed write to the SEC about (via the links above). IMHO, one of the main reasons that the OTC:BB stocks are so risky is not just because of sometimes the companies themselves, but because of the rampent manipulation of MM's to short the stocks and sell stock that just doesn't exist. This doesn't even mention the off shore short naked shorting either, which I understand this proposed rule will address as well. The OTC:BB is cleaning up the problem companies by requiring them to be fully reporting (that is, they MUST file reports with the SEC in a timely mannor) to remain on the OTC:BB, now it looks like they are about to clean up the house on the MM side by addressing the rampent Naked Shorting and manipulation by Market Makers of OTC:BB stocks. Here also is the OTC:BB new rules requiring that Companies be FULLY reporting. otcbb.com 'There are no minimum quantitative standards which must be met by an issuer for its securities to be quoted on the OTCBB; however, the new Eligibility Rule limits quotations on the OTCBB to the securities of issuers that are current in their reports filed with the SEC or other regulatory authority. ' and here as well .. otcbb.com and here ... otcbb.com We need as individual investors, to take action here, and write to the SEC telling them that they need to indeed end what is IMHO, the current sanctioned Raping of investors by Market Makers and Off shore entities by the rampent Naked shorting and Manipulation of OTC:BB stocks. Also, pay attention to the wording of the rules, as it appears that in this very same proposal, that the SEC is looking into removing the Uptick rule for stocks currently covered by the shorting rules. Currently if someone wants to short a stock, they must 1st wait until an uptick before they short it. This rule protects the investors, by making sure shorts do NOT orchrastrate a 'bear raid' or do a 'pile on' and in effect 'kill' the stock, the company and it's shareholders along with it. IMHO, we also need to make sure that the Uptick rule REMAINS in place as well. Now is the time to make your voice heard. We have until December 27th, 1999 to make our comments to the SEC on the issues contained in this proposal. You also need to read the whole proposal, as there might be also other issues contained within it that YOU might feel are important for YOU to comment on as well. JMHO, FWIW ... Voyager :-) Gary

To: Jim Bishop who wrote (7527)	11/23/1999 12:42:00 AM
From: Ga Bard	Respond to of 9440

OK if you want to respond to the SEc here is the questions. Maybe we can discuss the answers and post what a god answer would be. Never know when you put a bunch of heads together. Q1. Does Rule 10a-1 permit relatively unrestricted short selling in an advancing market? If not, please provide specific examples to demonstrate that this objective is not currently met. Q2. Does more short selling occur in an advancing market or a declining one? Q3. Should the threshold price for suspending the tick test be the previous closing price of the security? Q4. Should the threshold price correlate to a point change or a percentage change in the price of a security? Q5. Would volatile markets create complexity for this structure as short sellers must continually take into account the market price of the security to determine whether short selling is restricted? Q6. If the security's price moves below the threshold price, should the tick test remain in effect during the trading session even if the price subsequently moves above the threshold price? Q7. Is there another price or manner of determining a more effective threshold for this purpose? Q8. Could a short seller initiate downward momentum on the price of a security through short selling down to the threshold price? If so, could this momentum cause the depressing effect on the market for a security that Rule 10a-1 is intended to prevent? Q9. Is it appropriate or preferable to base short sale regulation on general market movements, rather than the price of individual securities? Q10. Are highly liquid securities less vulnerable to the abuses that Rule 10a-1 is designed to prevent? Q11. Are the Regulation M requirements for liquidity under the exception in Rule 101(c)(1) adequate standards for this purpose? If not, what values would work better for this purpose? Q12. Rule 10a-1 is not focused solely on preventing manipulative activity. Is it appropriate to use these anti-manipulation approaches in the short sale context? Q13. Are there corporate events (e.g., mergers, acquisitions, or tender offers) that make a security vulnerable to abusive short selling? Q14. Are there other cyclical, or regular market events (e.g., option expiration dates or the opening and closing of a trading session) that make a security vulnerable to abusive short selling? Q15. Are there other trading abuses or manipulations involving short sales under unusual market conditions that Rule 10a-1 currently does not address? If so, could the Rule be amended to prevent these abuses? Q16. Should short selling be prohibited for a period preceding a significant corporate or market event? Q17. If the Rule was eliminated, should restrictions continue to apply preceding a significant corporate or market event? Q19. Should the Commission exclude hedged short positions for the purposes of determining what a person's net position is under Rule 3b-3? Q20. Should long stock positions that are fully hedged be excluded from the calculation of a person's net position in that stock? Q21. Should a broad exception covering short sales offset by equivalent securities be proposed? If so, what securities should be considered equivalent? Q22. Is "economic neutrality" the proper basis for such an exception? If not, what types of relationships (using a short hedge) that appear to be economically neutral present a potential for manipulation that Rule 10a-1 is designed to prevent? Q23. Should an exception for hedging transactions be limited to transactions or positions that involve a complete hedge? If so, how should a complete hedge be defined and measured? Q24. What type of surveillance should the Commission consider for monitoring short sales conducted as part of economically neutral transactions? Q25. If the Consolidated Tape does not operate during after hours trading, should we consider adopting an exception to permit each ATS to use the last transaction in its system as the reference price? Q26. What impact would multiple permissible prices at which short sales could be executed have on the effectiveness of short sale regulation? Q27. If a number of ATSs all operated using their internal prices for Rule 10a-1 compliance, each could produce a different "closing" price at the close of trading on the ATS. How would multiple after-hours "last sale" prices affect the first trade in the morning trading session when the Consolidated Tape recommences operation? Q28. How did the recent decrease in the MPV from 1/8 to 1/16 affect short selling? Q29. How will the potential use of a smaller MPV affect the operation of Rule 10a-1? Q30. Is a price change as small as one penny per share the type of market impact that the short sale rule is designed to prevent? Q31. Would the use of a smaller MPV support modifying or eliminating Rule 10a-1? Q32. Should Rule 10a-1 be altered to remain effective with respect to smaller MPV? Q33. Should we consider changing the definition of "short sale" to reduce the need to aggregate positions within a single entity? Please describe other situations where an alternative to firm-wide aggregation is justified. Q34. Please describe examples of any manipulative strategies that exploit the current definition of "short sale," and whether regulatory measures should be adopted to combat such strategies. Q35. Should we consider extending short sale regulation to cover non-exchange listed securities? Q36. If so, how should the new regulation restrict short sales? Does the current NASD short sale rule provide an applicable model for this purpose? Q37. Are the objectives of Rule 10a-1 legitimate concerns in today's markets? Q38. Are the provisions of Rule 10a-1 necessary in the securities markets? If so, please give specific examples that demonstrate this need. Q39. Does Rule 10a-1 continue to serve a valid purpose in a declining market by preventing short sellers from accelerating declines in securities prices, or "depressing" the market? Q40. Does Rule 10a-1 prevent efficient pricing or slow the incorporation of negative perceptions into an efficient price? Does the need for more efficient pricing, if there is a need, outweigh the protective benefits of Rule 10a-1? Q41. Is Rule 10a-1 effective in preventing manipulative short selling? Q42. Would deregulation of short selling lead to an increase of speculation in the market? If so, would this increase disadvantage investors that are not engaged in speculation? Q43. Does Rule 10a-1 limit price volatility in the securities that it covers? Q44. Would investors avoid securities, or classes of securities, that they perceive to be vulnerable to abusive short selling? If so, would this result be exacerbated by deregulation of short selling? Q45. Would antifraud surveillance and enforcement actions be enough to protect investors from abusive short selling? Q46. If we rescind Rule 10a-1, should we reconsider a recordkeeping and/or disclosure requirement for significant short positions?75 Q47. Would dissemination of aggregate open short positions on a daily basis decrease the necessity of Rule 10a-1? What costs would be associated with such a program? Q48. If we rescind Rule 10a-1, should we consider adopting a rule that requires a seller to identify a source of borrowable shares prior to executing a short sale? Q49. If we rescind Rule 10a-1, should SROs continue to regulate short selling through their rules? Q50 If the short sale rule is retained, should we consider ways to regulate short sales of all securities, not just those listed on exchanges (specifically, OTC securities, including those securities quoted in the non-Nasdaq OTC markets)? Q51. If the short sale rule is retained, should we consider replacing the tick test with a bid test similar to NASD Rule 3350? Q52. Without the tick test, would market professionals have an unfair advantage over public investor limit orders? Q53. Would unrestricted short selling increase the risk for certain trading strategies (e.g., block positioning)?