SEC Eliminates Option Market-Maker Exception to Close-Out Requirement of Regulation SHO

October 27, 2008
The Securities and Exchange Commission has adopted a final rule that makes permanent its September Emergency Order eliminating the options market-maker exception to the close-out requirement of Regulation SHO. This update examines the new final rule, which also provides new guidance on what constitutes bona-fide market-making activity for purposes of the market-maker exemption from the locate requirement of Regulation SHO.