This postscript discusses the SEC's final
short sale rule, approved by a vote of 3-2 on February 24, 2010.
The 2003 SEC
short sale rule proposal was broad and instructive.
William Uchimoto, Ashton General Counsel, remarked, "our system has received an exemption from the
short sale rule to facilitate liquidity commitments of TSE participating organizations.
The issue of the
Short Sale Rule, its impact and practicability, has been a hot topic in the late 1980s and into the 1990s.
3n) (See Q 7642 for an explanation of short sales, Q 7644 for an explanation of "substantially identical property" for purposes of the
short sale rules, and Q 7663 for a definition of options.
Securities partnerships engaging in short sale transactions may be subject to the
short sale rules of IRC Sec.
These proprietary trading firms are estimated to account for 8% of trading activity in 2010 with future growth dependent on regulatory decisions covering fee caps, flash orders and
short sale rules from the SEC.
For an explanation of the
short sale rules, see Q 7642 to Q 7644.
1233
short sale rules were added to the IRC in 1950.
Enforcement of
Short Sale rules and Affirmative Determination Rule.
In applying the
short sale rules (see Q 7642 to Q 7649) a securities futures contract to acquire property will be treated in a manner similar to the property itself.
If none of the foregoing exceptions or elections applies or has been made, the straddle will generally be taxed under the loss deferral, wash sale, and
short sale rules explained below.
