May 30, 2007
If broker A fails to receive shares, they can institute a buy-in two days (that's right, TWO DAYS) after the initial fail day.
Broker A (the receiving broker)must tell DTC (Depository Trust Company)to to send a notice of intent to buy-in to Broker F (the fail to deliver broker)
REG SHO is moot. It attempts to stop naked short selling by forcing a buy-in 10 days after the 3rd fail day.
DTC will force a buy-in in 2 days if Broker A Buys-in Broker F.
Stock Loan departments should be penalized for all fails. When you fail to deliver, you get an F for a day. This is real life, not a test. So assess monetary damages for fails and you might get someones attention.