The SHO is held over

By: Ray Pellecchia

File Under: NYSE

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A day trader wrote to HybridTalk last week:

hey ray,

I'm sure I'm not the only one dying to know what\'s going to happen to reg sho at the end of the month. Will the SEC keep the pilot as is (ie. let us continue shorting pilot A stocks on downticks) or will the revert back to enforcing the uptick rule on all nyse stocks? -- mnx

Hey mnx -- Thanks for writing, and sorry I wasn't at the HybridTalk helm to respond to you sooner. As I catch up I see that in the interim, the SEC has answered your question. In case you missed the Commision's announcement:

On April 20, 2006, the Securities and Exchange Commission approved an order to extend the termination date of the short sale Pilot to Aug. 6, 2007. The Pilot temporarily suspends short sale price tests for certain securities so that the Commission can determine the effectiveness of such price tests and the impact of short selling in the absence of price tests. The Pilot had been scheduled to expire on April 28, 2006. Extending the Pilot termination date will maintain the status quo with regard to price tests while analysis of the Pilot results is completed.

Consistent with the Commission's previous orders, the staff has commenced studies based on one year of Pilot data. If the Pilot had terminated on April 28, 2006, market participants would need to make systems changes to comply with price tests for Pilot securities. The Commission's action avoids unnecessarily burdening market participants with the imposition of costs associated with restoring price tests for short sales in Pilot securities while allowing time for the Commission to analyze Pilot results that may be pertinent to any additional short sale rule making.