Chief Patron

Sen. Russ Potts (R-Winchester)

Russ Potts (R-Winchester)
Served: 1992–

Status

Bill is Dead
View Entire History

Summary

Securities Act; reporting short sales.  Requires a registered broker-dealer that is selling or purchasing for a customer or its own account to notify the State Corporation Commission of the failure to settle, by delivery of securities of like kind and quality, a trade in a threshold security of an issuer domiciled in the Commonwealth or with its principal office located in the Commonwealth. The notice is required to be filed within 24 hours following the failure to settle. A broker-dealer who fails to file the notice during the period July 1, 2007, until July 1, 2008, is liable to the company for $1,000 for each business day the broker-dealer fails to provide the required notice and if the notice is not filed for six or more business days, is liable for the greater of (i) $1,000 for each business day or (ii) the sum of the sales price for each securities share in the subject trade that has not been delivered in settlement; however, if the failure occurs on or after July 1, 2008, liability increases from $1,000 to $10,000 per day. Threshold securities are equity securities that have an aggregate fail-to-deliver position for five consecutive settlement days at a registered clearing agency, total 10,000 shares or more, and are equal to at least 0.5% of the issuer's total shares outstanding. The measure applies to securities transactions occurring on or after July 1, 2007.