SEC-PR-2501-5 (Jan. 13, 2025) (SEC-PR-2501) Two Robinhood Broker-Dealers to Pay $45 Million in Combined Penalties for Violating More Than 10 Separate Securities Law Provisions Excerpt: Washington D.C., Jan. 13, 2025 — The Securities and Exchange Commission today announced that broker-dealers Robinhood Securities LLC and Robinhood Financial LLC (collectively, Robinhood) have agreed to pay $45 million […]
Category: Regulation SHO
Regulation SHO is a set of rules established by the Securities and Exchange Commission (SEC) to govern short selling in the U.S. securities markets, aiming to enhance transparency and reduce the potential for abusive practices. Implemented in 2005, Regulation SHO requires that short sellers locate and secure a source of borrowable shares before executing a short sale, thereby addressing concerns about “naked short selling,” where sellers sell shares they do not own and have not borrowed. The regulation also includes a “close-out” requirement, mandating that broker-dealers must buy back and return shares that have been sold short but not properly delivered within a specified time frame. By enforcing these rules, Regulation SHO seeks to promote fair trading practices, enhance market integrity, and protect investors from the risks associated with short selling.
- ♦ (SEC) (www.sec.gov) – Key Points About Regulation SHO
- ♦ (FEDREG) (www.ecfr.gov) – Regulation SHO—Regulation of Short Sales
- ♦ (FINRA) (www.finra.org) – Regulation SHO – Bona Fide Market Making Exemptions and Reuse of Locates for Intraday Buy-to-Cover Trades