How should a broker-dealer mark an order where the seller is net long for only part of the order?
A seller may be net long a security but wish to sell additional shares of that security in excess of the seller’s net long position. For example, a seller may be net long 500 shares of a security but may wish to sell a total of 600 shares of that security. Under such circumstances, only 500 shares can be sold long, and the remaining 100 shares must be sold short. Rule 200(g) of Regulation SHO requires a broker-dealer to mark sell orders in any equity security as “long” or “short.” Rule 200(a) defines a short sale as “any sale of a security which the seller does not own or any sale which is consummated by the delivery of a security borrowed by, or for the account of, the seller.” Rule 200(g)(1) provides that “[a]n order to sell shall be marked “long” only if the seller is deemed to own the security being sold pursuant to paragraphs (a) through (f) of this section and either: (i) The security to be delivered is in the physical possession or control of the broker or dealer; or (ii) It is
Related Questions
- How should a broker-dealer mark an order where the seller is net long 1,000 shares and wants to simultaneously enter multiple orders to sell 1,000 shares each?
- May a seller mark an order "long" if the seller owns the security pursuant to Rule 200(b) but is not "net long" in the security?
- How should a broker-dealer mark an order where the seller is net long for only part of the order?
