SECURITIES EXCHANGE ACT OF 1934
RELEASE NO. 58611 / September 21, 2008
Pursuant to Section 12(k)(2) of the Securities Exchange Act of 1934, on September 18, 2008, the Securities and Exchange Commission (“Commission”) issued an Emergency Order (the “Order”) related to short selling the publicly traded securities of certain financial firms. Release NO. 58611/September 21, 2008 added the following amendments for options market makers:
Market Making and Derivatives
This order provides an exception for any person that is a market maker that effects a short sale as part of bona fide market making and hedging activity related directly to bona fide market making in derivatives on the publicly traded securities of any Included Financial Firm. This exception applies to all market makers, including over-the-counter market makers, and that it applies to bona fide market making and hedging activity related directly to bona fide market making in exchange traded funds and exchange traded notes of which Covered Securities are a component. The purpose of this accommodation is to permit market makers to continue to provide liquidity to the markets.
To help ensure that this hedging exception does not result in increased short exposure in Covered Securities, we are limiting the exception so that if a customer or counterparty position in a derivative security based on a Covered Security is established after 12:01 a.m. E.D.T on September 22, 2008, a market maker may not effect a short sale in the Covered Security if the market maker knows that the customer’s or counterparty's transaction will result in the customer or counterparty establishing or increasing an economic net short position (i.e., through actual positions, derivatives, or otherwise) in the issued share capital of a firm covered by this Order.
Please contact Matt Abraham (312) 863-8018, with any questions concerning this notice.