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Thursday, July 17, 2008

Equity Regulatory Alert #2008 - 13
Securities and Exchange Commission Implements Emergency Order Prohibiting Short Sales, Effective Monday, July 21, 2008

Please Route To:

Head Traders; Compliance Officers; Technical Contacts

What you need to know:

  • On Tuesday, July 15, 2008, the Securities and Exchange Commission (SEC) announced the implementation of an emergency order requiring borrowing or arranging to borrow the security prior to short selling.
  • The emergency order will take effect Monday, July 21, 2008.
  • Additional information regarding the emergency order can be found on the SEC website.

Who you should contact:

NASDAQ Market Operations +1 212 231 5100

What is changing?

On Tuesday, July 15, 2008, the Securities and Exchange Commission (SEC) announced that effective Monday, July 21, 2008, it will implement an emergency order requiring borrowing or arranging to borrow the security prior to short selling in the issues of Fannie Mae, Freddie Mac and in other financial institutions.

Current short sale rules state that a short seller must first locate shares to borrow, however, is not required to enter into a contract with the share lender. The new emergency order states that a short seller will now be required to have an actual agreement in order to borrow the shares.

What securities are subject to the order?

CompanyTickerSymbol(s)
BNP Paribas Securities Corp.BNPQF or BNPQY
Bank of America CorporationBAC
Barclays PLCBCS
Citigroup Inc.C
Credit Suisse GroupCS
Daiwa Securities Group Inc.DSECY
Deutsche Bank Group AGDB
Allianz SEAZ
Goldman, Sachs Group IncGS
Royal Bank ADSRBS
HSBC Holdings PLC ADSHBC and HSI
J. P. Morgan Chase & Co.JPM
Lehman Brothers Holdings Inc.    LEH
Merrill Lynch & Co., Inc.MER
Mizuho Financial Group, Inc.MFG
Morgan StanleyMS
UBS AGUBS
Freddie MacFRE
Fannie MaeFNM
 

When will the emergency order be implemented?

The emergency order will take effect on Monday, July 21, 2008.

Where can I get additional information?


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