From: Anthony Gentile [anthony.gentile@earthlink.net] |
I support implementing tighter controls to ensure that short sellers in all equity securities to locate securities to borrow before selling them. Further, I agree that there should be procedures in place to prevent the 'naked' selling of all stocks on the bulletin board, Nasdaq NMS, and NYSE. As mentioned on your web site, short sale rules prevent the damaging "bear raids" and can exacerbate a declining market. I understand that the decentralized nature of the Nasdaq market makes the zero uptick rule difficult, if not impossible, to implement on the Nasdaq. However, I question the effectiveness of the bid test to stabilize the market, because it does not require a trade to take place at a "zero uptick" price before stock can be sold. For this reason, I believe that the zero uptick rule is more effective at stabilizing markets than the uniform bid test. Therefore, I do not support replacing the zero uptick rule with the uniform bid test on ANY NYSE stocks. In the absence of a better solution, I support use of the uniform bid test on all Nasdaq NMS and bulletin board stocks. I do not see the point of allowing unrestricted short selling in any liquid securities. Unrestricted short selling will just allow the abuses of the past to happen again. I don't see how the effects of unrestricted short selling today would be any different today than they were in the 1920's. Anthony Gentile |