Cryptocurrency Q&A
What is Rule 200?
What is Rule 200?
MysticInfinity
Mon Sep 09 2024
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7 answers
1856
Could you please clarify what Rule 200 refers to in the context of cryptocurrency and finance? Is it a specific regulation imposed by a governing body, an internal policy within a financial institution, or perhaps a widely accepted industry guideline? Could you provide some context on where this rule originates and what it aims to achieve in terms of protecting investors, ensuring market integrity, or facilitating fair and transparent transactions? Understanding the nature and purpose of Rule 200 would help us appreciate its significance in the cryptocurrency and finance landscape.
7 answers
Ilaria
Wed Sep 11 2024
Rule 200(g) is a critical regulation in the securities trading industry, mandating that broker-dealers must clearly identify the nature of every sell order they execute. Specifically, each sell order for an equity security must be marked as either "long," "short," or "short exempt." This distinction is essential for maintaining transparency and ensuring that market participants have accurate information about the source and intentions behind each trade.
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FantasylitElation
Wed Sep 11 2024
A sell order can be designated as "long" only if the seller meets specific criteria. Primarily, the seller must be "deemed to own" the security being sold. This means that the seller must have a legal right to dispose of the security, whether they physically possess it or not.
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Riccardo
Wed Sep 11 2024
In addition to being deemed to own the security, the seller must also fulfill one of two additional conditions for a sell order to be marked as "long." The first condition is that the security to be delivered must be in the physical possession or control of the seller, their agent, or a third-party designated by the seller.
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Riccardo
Tue Sep 10 2024
The second condition for a sell order to be marked "long" is that the seller has entered into a binding agreement to purchase the security from a third-party. This agreement must be irrevocable and unconditional, ensuring that the seller will have the necessary funds and authority to deliver the security upon settlement.
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Silvia
Tue Sep 10 2024
If a seller does not meet the criteria for a "long" sell order, they must instead mark their order as "short" or "short exempt." A "short" sell order indicates that the seller does not currently own the security being sold but intends to borrow it or acquire it before settlement. A "short exempt" sell order, on the other hand, is a special type of short sale that is exempt from certain regulatory requirements.
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