|
EDUCATION - Article |
|
Regulation SHO Definition What It Regulates and Requirements
Source : Investopedia
Vous trouverez dans cette section un ensemble d'articles accessibles à tout public désirant mieux comprendre les définitions que nous considérons importantes dans la finance d'aujourd'hui et duTrading lors de Marchés très Volatiles.
Source principale : Investopedia
Source principale : Investopedia
Source : Regulation SHO: Definition, What It Regulates, and Requirements (investopedia.com), LAWS & REGULATIONS, SEC
By TROY SEGAL, Updated April 29, 2022, Reviewed by CAITLIN CLARKE, Fact checked by MICHAEL LOGAN
What Is Regulation SHO?
Regulation SHO is a set of rules from the Securities and Exchange Commission (SEC) implemented in 2005 that regulates short sale practices.
Réglementation SHO a établi des exigences de « localisation » et de « clôture » visant à : Réduction naked short selling and other practices. Naked shorting takes place when investors sell short shares that they do not possess and have not confirmed their ability to possess.1
KEY TAKEAWAYS
The SEC implemented Regulation SHO on January 3, 2005--the first significant update to short selling rules since they were first adopted in 1938. Regulation SHO's "locate" standard requires brokers to have a reasonable belief the equity to be shorted can be borrowed and delivered on a specific date before short selling can occur. The "close-out" standard represents the increased amount of delivery requirements imposed upon securities that have many extended delivery failures at a clearing agency.1
Regulation SHO requires reporting when the following has occurred for five consecutive settlement days:1
Further changes to Regulation SHO came in 2010. One of the primary issues the SEC had originally sought to address was the use of short selling to artificially force down the price of a security. It specifically dealt with this problem via the modification of Rule 201, which limits the price that short sales can be affected during a period of significant downward price pressure on a stock.1
Rule 201 is colloquially known as the alternative uptick rule.2
Rule 201 is triggered in the midst of a substantial decrease in a stock's price during intraday trading—specifically when its shares fall at least 10% in one day. It mandates that short-sale orders must include a price above the current bid, a move that prevents sellers from accelerating the downward momentum of a security already in sharp decline.1
As a part of Rule 201, trading centers are required to establish and enforce policies that prevent short sales at what would be deemed impermissible prices after a stock is dealt a 10% decrease in its price within the trading day. This would trigger a "circuit breaker" that would bring price test restrictions into effect on short sales on that day and into the next trading day.1
Special ConsiderationsCertain types of short sales can qualify for an exception to Regulation SHO. These orders are known as short exempt and are marked by brokers with the initials SSE. The primary exception is the use of non-standard pricing quotes for trade execution.1
Related Terms
What Is the Threshold Securities List? Definition and Criteria
A threshold list, or Regulation SHO Threshold Security List, details securities whose transactions failed to clear at a registered clearing agency. more
What Is Short Exempt? Definition and How It Works in Trading
"Short exempt" refers to a short sale order exempted from the uptick rule regulated under the Securities and Exchange Commission’s (SEC) Regulation SHO. more
What Is Naked Short Selling, How Does It Work, and Is It Legal?
Naked shorting refers to the practice of selling shorts associated with shares that investors do not already possess. more
Short Selling: Definition, Pros, Cons, and Examples
Short selling occurs when an investor borrows a security, sells it on the open market, and expects to buy it back later for less money. more
Hard-To-Borrow List
A hard-to-borrow list is an inventory record used by brokerages to indicate what securities are difficult to borrow for short sale transactions. more
Plus Tick Definition
A plus tick is a price designation referring to the trading of a security at a price higher than the previous sale price for the same security. more
By TROY SEGAL, Updated April 29, 2022, Reviewed by CAITLIN CLARKE, Fact checked by MICHAEL LOGAN
What Is Regulation SHO?
Regulation SHO is a set of rules from the Securities and Exchange Commission (SEC) implemented in 2005 that regulates short sale practices.
Réglementation SHO a établi des exigences de « localisation » et de « clôture » visant à : Réduction naked short selling and other practices. Naked shorting takes place when investors sell short shares that they do not possess and have not confirmed their ability to possess.1
KEY TAKEAWAYS
- Regulation SHO is a 2005 SEC rule that regulates short selling.
- The regulation introduced the "locate" and "close-out" requirements aimed at curtailing naked short selling.
- In 2010, Regulation SHO was amended via changes to Rule 201, which stops short selling on a security when prices have decreased by 10% or more during the trading day, mandating that new bids be above the current price.
The SEC implemented Regulation SHO on January 3, 2005--the first significant update to short selling rules since they were first adopted in 1938. Regulation SHO's "locate" standard requires brokers to have a reasonable belief the equity to be shorted can be borrowed and delivered on a specific date before short selling can occur. The "close-out" standard represents the increased amount of delivery requirements imposed upon securities that have many extended delivery failures at a clearing agency.1
Regulation SHO requires reporting when the following has occurred for five consecutive settlement days:1
- The aggregate fails to deliver at a registered clearing agency of 10,000 shares or more per security.
- The number of fails is equal to at least one-half of one percent of the issue's total shares outstanding.
- The security is included on a list published by a self-regulatory organization (SRO).
Further changes to Regulation SHO came in 2010. One of the primary issues the SEC had originally sought to address was the use of short selling to artificially force down the price of a security. It specifically dealt with this problem via the modification of Rule 201, which limits the price that short sales can be affected during a period of significant downward price pressure on a stock.1
Rule 201 is colloquially known as the alternative uptick rule.2
Rule 201 is triggered in the midst of a substantial decrease in a stock's price during intraday trading—specifically when its shares fall at least 10% in one day. It mandates that short-sale orders must include a price above the current bid, a move that prevents sellers from accelerating the downward momentum of a security already in sharp decline.1
As a part of Rule 201, trading centers are required to establish and enforce policies that prevent short sales at what would be deemed impermissible prices after a stock is dealt a 10% decrease in its price within the trading day. This would trigger a "circuit breaker" that would bring price test restrictions into effect on short sales on that day and into the next trading day.1
Special ConsiderationsCertain types of short sales can qualify for an exception to Regulation SHO. These orders are known as short exempt and are marked by brokers with the initials SSE. The primary exception is the use of non-standard pricing quotes for trade execution.1
Related Terms
What Is the Threshold Securities List? Definition and Criteria
A threshold list, or Regulation SHO Threshold Security List, details securities whose transactions failed to clear at a registered clearing agency. more
What Is Short Exempt? Definition and How It Works in Trading
"Short exempt" refers to a short sale order exempted from the uptick rule regulated under the Securities and Exchange Commission’s (SEC) Regulation SHO. more
What Is Naked Short Selling, How Does It Work, and Is It Legal?
Naked shorting refers to the practice of selling shorts associated with shares that investors do not already possess. more
Short Selling: Definition, Pros, Cons, and Examples
Short selling occurs when an investor borrows a security, sells it on the open market, and expects to buy it back later for less money. more
Hard-To-Borrow List
A hard-to-borrow list is an inventory record used by brokerages to indicate what securities are difficult to borrow for short sale transactions. more
Plus Tick Definition
A plus tick is a price designation referring to the trading of a security at a price higher than the previous sale price for the same security. more
« From a Seed to a Banyan Tree »
Devenez une graine de croissance de votre propre « Indépendance Financière ».
AVERTISSEMENT : Introduction à la formation
Les renseignements fournis dans les présentent publications sont donnés uniquement à titre d’information et ne constituent en aucun cas une offre, sollicitation, démarchage ou recommandation d’achat ou de vente de placements ou d’engagement dans toute autre transaction. Toute information, description, exemple et calcul contenus dans cette publication sont fournis à titre d’indication et ne doivent pas être traités comme faisant autorité.
Les informations présentées ne constituent pas un conseil en investissement. Les présentes informations proviennent de sources extérieures et sont données à titre indicatif. AZ Parking et son Auteur Christian P. GATT, lui-même, ne sauraient être tenue responsable pour les dommages directs ou indirects résultants d'erreurs, d'omissions ou de modifications ultérieures des données.
Le placement en Bourse est risqué. Vous pouvez subir des pertes. Les performances passées ne préjugent pas des performances futures, elles ne sont pas constantes dans le temps. Avant toute décision d'investissement ou de désinvestissement dans ces produits, le Client doit impérativement apprécier ses choix en fonction de sa situation financière, de son expérience et de ses objectifs personnels en matière de placement (notamment en termes de degré d'acceptation du risque de perte en capital et de durée d'investissement envisagée).
ici pour modifier.
Les informations présentées ne constituent pas un conseil en investissement. Les présentes informations proviennent de sources extérieures et sont données à titre indicatif. AZ Parking et son Auteur Christian P. GATT, lui-même, ne sauraient être tenue responsable pour les dommages directs ou indirects résultants d'erreurs, d'omissions ou de modifications ultérieures des données.
Le placement en Bourse est risqué. Vous pouvez subir des pertes. Les performances passées ne préjugent pas des performances futures, elles ne sont pas constantes dans le temps. Avant toute décision d'investissement ou de désinvestissement dans ces produits, le Client doit impérativement apprécier ses choix en fonction de sa situation financière, de son expérience et de ses objectifs personnels en matière de placement (notamment en termes de degré d'acceptation du risque de perte en capital et de durée d'investissement envisagée).
ici pour modifier.