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References (9)
-
Securities Exchange Act Release No -
(1948)
WDCO at 4, citing FTC v. Morton Salt Co -
SEC enforcement cases make it clear that the SEC considers the locate requirement to continue to be a central element in its efforts to curtail abusive short selling -
The firm initially did not settle with the SEC, while its chief executive officer, head of proprietary trading, and the trader that allegedly caused the violations settled -
(settlement as to Robert A. Wolfson and Golden Anchor Trading II, LLC); "Short Selling Brothers Agree to Pay $14.5 Million to Settle SEC Charges -
(2012)
A discussion of what the SEC has referred to as “sham transactions” is beyond the scope of this note -
(2015)
SEC, Division of Market Regulation, “Responses to Frequently Asked Questions Concerning Regulation SHO” (“Regulation SHO FAQ”s) -
See 15 USC. § 78o(b) -
) exception to be available, the market maker also must be registered as a market maker (e.g., as an exchange member) or be obligated to quote in the over-the-counter market
- Publisher
- Emerald Publishing
- Copyright
- © 2017 Murphy & McGonigle P.C.
- ISSN
- 1528-5812
- DOI
- 10.1108/joic-04-2017-0019
- Publisher site
- See Article on Publisher Site
Abstract
To summarize and analyze guidance provided by the US Securities and Exchange Commission (“SEC”) on what constitutes “bona-fide market making” for purposes of Regulation SHO’s exception to the locate requirement.Design/methodology/approachExplains SEC guidance on this subject, focusing on statements by the SEC and its staff related to Regulation SHO and SEC enforcement matters, including a recent SEC administrative proceeding providing concrete examples of activity that does not constitute bona-fide market making.FindingsWhile there is still a lot of room for additional SEC guidance on what constitutes bona-fide market making, the SEC has provided some details on the specific type of trading that would not fall within the Regulation SHO exceptions applying to bona-fide market making activities. However, there is still a large gap between the type of activity that most likely falls within the exception and the concrete examples analyzed by the SEC.Originality/valuePractical guidance from experienced securities lawyers that consolidates SEC guidance on the bona-fide market making exception.
Journal
Journal of Investment Compliance – Emerald Publishing
Published: Jul 3, 2017
Keywords: Broker-dealer; US Securities and Exchange Commission (SEC); Bona-fide market making; Regulation SHO