MMs shorting25 Mar 2018 15:20
I have had a read through the rules of a market maker...eye opening, long winded and will have to read it several times!!
But this bit relevant to the convo on friday,
"Short selling ( member firms are MMs)
Member firms are required to have at all times adequate systems and controls to ensure that
their business is being conducted and settled in accordance with the Exchange�s rules.
These systems should enable member firms to monitor trading positions (long and short),
identify stock shortages, settlement delays or backlogs, particularly where these may be
attributable to running a substantial short position in a particular security. Member firms
are also obliged under rule 1400 not to do any act or engage in any course of conduct which
is likely to damage the fairness or integrity of the Exchange�s markets, or which might create
a false or misleading impression as to the markets or price of a security. Member
firms must ensure that when they undertake short selling on a substantial scale, either on
their own account or on behalf of customers, they have a clear strategy for ensuring the
settlement of their short positions. If member firms believe at any point that they will be
unable to fulfil their settlement obligations they should not continue to pursue their short
selling strategy.
Short selling on a substantial scale can lead to significant settlement problems, which in turn
can result in the Exchange having to issue a market status message warning the market of
settlement problems. Where the Exchange issues such a message firms should consider
very carefully whether further short selling will exacerbate the situation, in which case
member firms should not continue to short sell (unless stock is available to cover any new
positions). Member firms should cooperate with the Exchange to ensure timely settlement,
including making every effort to settle outstanding unsettled short positions".
Sign In
Follow the stocks
