Regulation SHO: Short-Sale Compliance

What this video covers

• Why the long or short determination is made at the aggregation unit level, not firm-wide, and how to catch the exam trap where one desk's position infects another desk's marking
• What "short exempt" actually means: an exception to the alternative uptick rule only, not an exemption from locate or close-out obligations
• The three ways to satisfy the locate requirement, and why documentation must exist before order entry (not before settlement)
• The bona fide market-maker exception to the locate requirement, and when it disappears on directional proprietary trades
• The close-out deadlines: T+1 for short-sale fails versus T+3 for long-sale fails, and what triggers each timeline
• How a stock becomes a threshold security: the five-day, 10,000-share, and 0.5% of outstanding shares triggers that all must fire together
• The alternative uptick rule: the 10% intraday drop trigger, its two-day duration, and why short sales must price above the National Best Bid (NBB) while active
• The pre-borrow penalty box: how failing to close out escalates a reasonable locate into an actual shares-in-hand requirement