How should broker-dealers determine “reasonableness” to satisfy the locate requirement of Regulation SHO?
Rule 203(b)(1)(ii) permits a broker or dealer to accept a short sale order in an equity security if the broker-dealer has reasonable grounds to believe that the security can be borrowed so that it can be delivered on the settlement date. “Reasonableness” is determined based on the facts and circumstances of the particular transaction. What is reasonable in one context may not be reasonable in another context. The Commission provided some examples of reasonableness in the Adopting Release. (69 FR at 48014 and Footnotes 58, 61 and 62).
Related Questions
- How do I determine when an appeal is "taken" to satisfy the requirement for filing a Rule 500.9 preliminary appeal statement within "10 days from the time the appeal is taken"?
- Where can I locate a list of TDLR-approved courses that satisfy the 40 hour pre-license education requirement?
- How should broker-dealers determine "reasonableness" to satisfy the locate requirement of Regulation SHO?
