Should brokers and dealers mark orders involving Category B Pilot Securities “short” before 4:15 pm ET, and then change the marking of the orders to “short exempt” after 4:15 pm ET?
The Pilot Order provides that short sale price tests are suspended for short sales in Category B Pilot Securities only from 4:15 pm ET until the open of the consolidated tape the next day. Therefore, from 4:15 pm ET until the open of the consolidated tape the next day, short sale orders in Category B Pilot Securities should be marked “short exempt.” At all other times, Category B Pilot Securities are subject to short sale prices tests; consequently, such securities at such times should be marked “short.” Brokers and dealers are responsible for the marking of orders under Regulation SHO. In lieu of marking orders, a broker or dealer may rely on the exemption that has been granted from the order marking requirements of Regulation SHO and process such short sale orders through market centers that “mask” short sale order instructions in accordance with the terms of Rule 200(g) and the Pilot. Question C.5: How should brokers and dealers execute a guaranteed close short sale order for a Cate
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