[supercat]

In a nutshell, the SEC was/is getting a small fee off each of the shares in stock transactions and apparently reigning in the “failures to deliver” was going to put a dent in their cash flow.

What problems would exist with the following rule:

1. Anyone selling a stock will be expected to demonstrate that they had possession at the time of sale.
2. If someone fails to demonstrate possession at the time of sale, the buyer shall have the option, within 24 hours of delivery, to either:
   1. Accept the stock at the lowest price that it traded between the time of sale and the earliest time at which possession can be proven, or
   2. Reject the sale and demand a refund of the purchase price.
3. Traders who are in default on any trades are forbidden from engaging in future trades until the default is cleared; if they have to go through a broker to get the assets necessary to clear the default, that's their problem.
4. Naked short selling would be criminal in cases where the prosecution could show there was no intention of actually proceeding with the sale, but it would otherwise be 'legal' if conducted according to the above rules. Note, however, that the above rules would cause naked short selling to be in almost every scenario no more profitable and no less risky than legitimate short selling.

How do those sound for rules?

[Axenolith]

Works for me!

Personally, I don’t short, the equities I’m in aren’t the ones to be shorting in this environment and finding short candidates would take to much time and research (rather be detecting!)