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To: kaseyMIT who wrote (40301)	5/22/2001 1:30:05 AM
From: kaseyMIT	Respond to of 40688

Follow-up comments on previous post. By: geoffkrone $$$$ Reply To: None Monday, 21 May 2001 at 10:20 PM EDT Post # of 41284 Short selling - FACTS on proposed SEC Rule Changes IMHO the material that was reposted here today regarding this topic was probably at least partially fictitious. (I don't mean to criticize those who reposted it here, as no one claimed it to be gospel!) Somebody claims to know somebody who talked to somebody at the SEC who probably said more than she should have -- Yada Yada, standard format for an urban legend or counterfeit virus report. The SEC staffer is not identified by name. Also, the way it is written, the reader gets the impression that the Rule that is cited has something to do with short selling. It doesn't -- It has to do with requirements imposed upon companies to report information about themselves to the SEC. In other words, it relates to protection of the public against being sold stock in scams -- It has nothing to do with protecting legitimate companies and their shareholders from excessive naked shorting. Another hallmark of an urban legend -- Contains some references to obscure "facts" which hardly anyone will take the time to check out, and which are irrelevant to the topic. However -- As is sometimes the case with urban legends as well! -- There is a kernel of truth. The SEC is in fact soliciting comments regarding a wide range of possible changes to the Rules governing short sales. If you take the time to follow the link below, you will see that they are considering a VERY wide range of alternatives. Far from being on a blatantly open crusade to bring justice to the OTC BB markets (as the "legend" suggests), one of the alternatives they are considering is to discontinue regulation of short sales altogether! But another (obviously conflicting) alternative that they are considering is the application of the rules which govern short selling on the NYSE, AMEX, and (in slightly different form) the NASDAQ National Market System to the OTC Bulletin Board market. Anyone with a serious interest in this topic ought to take a gander at the whole thang. The most relevant part has been cut and pasted for those who just want PART of the facts -- LOL! If you are interested in giving the SEC an earful, follow the link and find the contact information. Rest assured, they will be getting plenty of input from people who want less regulation rather than more.... Best regards, Geoff sec.gov G. Extending the Short Sale Rule to Non-Exchange Listed Securities Current short sale regulations cover securities that are either listed on an exchange or traded in the Nasdaq NMS. As a result, they cover securities that are generally characterized by high trading liquidity. In addition, these markets have a relatively high degree of transparency. Securities traded in the OTC markets (e.g., Nasdaq Small Cap, the NASD's OTCBB, the Pink Sheets) are not subject to short sale restrictions. The staff frequently receives complaints alleging short sale abuses involving securities in the OTC markets. As a corollary to other concepts presented in this release, we seek comment on regulating short sales in this market sector. We recognize that Section 10(a) does not grant specific authority to the Commission to regulate short sales of securities not listed on a national exchange. Thus, regulations that extend short sale regulation to new market sectors would have to be adopted under other available statutory authority. 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?