Overview

As many of you have recognized, short-selling rules in the US are antiquated and riddled with loopholes. We The Investors has officially petitioned the SEC to amend Reg  SHO with the following changes:

1. Rule 203: Require all short sales, without exception, to be backed by a confirmed borrow of securities prior to execution.
2. Rule 204: Impose escalating monetary fees or fines for FTDs, applicable to all market participants, with proceeds supporting enforcement.
3. Rule 204: Eliminate all market maker exceptions to locate and close-out requirements, ensuring uniform settlement timelines.

You can view the full text of our petition here. We urge you to file a comment letter if you support these changes. For this campaign, we're asking you to write your own comment letter, as that will be more effective than form letters. The critical points to hit would be:

• US markets have a problem - short selling and failing to deliver is distorting supply and demand in markets, impairing the price discovery process.
• The persistence of FTDs introduces systemic risk.
• Enforcement actions have demonstrated that loopholes are being abused.

Therefore, you fully support the proposed changes to Reg SHO in this rulemaking petition.

You can also use our form letter included on this page, however individual letters are far more effective.

How To File a Comment Letter

If you are interested in filing a comment letter, the simplest and safest way is to do so by email. If you would like to write your own comment letter, we have some guidance and information for you.

When signing a comment letter, you can do so electronically (type your name and position/title at the bottom) or print, sign and scan it.

Please follow these steps to file the comment letter:

1. The subject line must include the File Number. For this proposal, you should use this subject: "Comment Letter for File Number 4-848 Petition for Rulemaking to amend Reg SHO to require pre-borrows for all short sales, impose fees for Fails To Deliver and eliminate market maker exceptions"
2. Attach your comment letter, preferably as a PDF (alternatives include Word or Text docs).
3. Send the email to rule-comments@sec.gov.
4. Share this on social media! Let everyone know that you've gotten involved in the process, that you've put the effort in to make yourself heard, and encourage them to do the same. Use the hashtag #WeTheInvestors.

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