Locates and Borrows

What this video covers

• The two sourcing routes before accepting or effecting a short sale: an actual borrow or bona-fide arrangement, and reasonable grounds to believe the stock can be borrowed for delivery
• Why documented compliance is required on both sourcing routes, including the exam trap that reasonable belief does not mean a completed borrow
• The four situations that excuse the locate: another registered firm, a deemed owner intending to deliver, bona-fide market making, and security futures
• The 35-day deemed-owner backstop, including the choice between borrowing securities and closing out by purchasing securities of like kind and quantity
• Why the bona-fide market maker exception applies security by security, and who falls within the statutory market maker definition
• How contractual responsibility reverses the registered-firm exception when a firm takes on the locate duty itself
• The long-sale prohibitions and three exceptions, including why an exchange or association finding must come before any loan, arrangement to loan, or failure to deliver