Summary

GAO reviewed the Securities and Exchange Commission's (SEC) new rule on amendments to regulation SHO. GAO found that (1) the interim final temporary rule addresses abusive "naked" short selling in all equity securities by requiring that participants of a clearing agency registered with the Commission deliver securities by settlement date, or if the participants have not delivered shares by settlement date, immediately purchase or borrow securities to close out the fail to deliver position by no later than the beginning of regular trading hours on the settlement day following the day the participant incurred the fail to deliver position; and (2) SEC complied with the applicable requirements in promulgating the rule.