NASD Notice to Members 00-28 - May 2000

SEC Approves Use of Hard to Borrow List to Comply with the Affirmative Determination Requirement for Short Sales (Rule 3370)

Executive Summary

On March 23, 2000, the Securities and Exchange Commission (SEC) approved amendments to National Association of Securities Dealers, Inc. (NASD®) Rule 3370, which is designed to prevent abusive short selling and ensure that short sellers satisfy their settlement obligations. The amendments permit the use of a "Hard to Borrow" list to comply with the affirmative determination requirement for short sales in The Nasdaq Stock Market, Inc. (Nasdaq®) National Market (NM) and exchange-listed securities. The amendments become effective on June 9, 2000.


Questions concerning this Notice may be directed to Stephanie M. Dumont, Assistant General Counsel, Office of General Counsel, NASD Regulation, Inc. (NASD RegulationSM) at (202) 728-8176; or to the Legal Section, Market Regulation Department, NASD Regulation, at (301) 590-6410.