SEC Exemptive Order from Certain Rules of Regulation SHO Related to Hurricane Sandy

The SEC is releasing an exemptive order from the "locate," short sale price test, and close-out requirements of regulation SHO for sales of vault securities. In the aftermath of Hurricane Sandy, the Depository Trust Clearing Corporation (DTCC) reported significant damage throughout DTCC's vault. As a result, physical certificates have been considered inaccessible. Sales of owned securities, whose settlement is dependent on the delivery of such physical certificates, may experience settlement delays as a result of the inaccessibility of the physical certificates. These delays have implications for compliance with Regulation SHO under the Exchange Act. However, DTCC and the Securities Transfer Association, Inc. (STA) recently announced an agreement on a protocol for the replacement and transfer of shares represented by the currently inaccessible physical certificates held in the vault at the time of Hurricane Sandy, facilitating DTCC's ability to continue physical processing.

Absent further action by the SEC, these exemptions will expire on February 1, 2013.

View Release in full here (links externally to SEC website).See also: Incoming Letter