Regulation SHO Pilot

Overview
http://www.nasdaqtrader.com/Trader.aspx?id=RegSHOPilot
The SEC issued a final rule amending its short sale price test. The rule eliminated the Rule 10a-1 tick test as well as the short-sale
price tests of any self-regulatory organization, including NASDAQs Rule 3350 bid test. NASDAQ eliminated short-sale validation on
July 6, 2007.
The SEC rule also removed the Regulation SHO requirement that a broker-dealer mark a sell order short exempt if the seller is
relying on an exemption from a price test.
NASDAQ maintained the list for the Reg SHO price test change until October 4, 2007. Effective October 5, 2007, broker-dealers
are no longer permitted to mark sales short exempt; instead all short sales must be marked short.
For the latest information, please see our Regulation SHO page.
http://www.nasdaqtrader.com/trader.aspx?id=RegSHO

Regulation SHO
REG SHO Overview
SEC Regulation SHO originally set (1) new rules governing short sales and (2) a pilot program suspending short sale price tests in a
subset of securities to allow the Securities and Exchange Commission (SEC) to gather data to evaluate the need for any price test
restrictions. However, in July 2007, the second component of Reg SHO was eliminated.

Regulation SHO Threshold Security List

On October 24, 2008, an incorrect Regulation SHO Threshold List for NASDAQ and OTCBB stocks was published on the
NASDAQ Trader website. As a result of a process timing error, the original published Regulation SHO Threshold/NASD Rule
3210 List has been modified. For more information, refer to General News Item #2008-9.
Effective January 3, 2005, new short sale rules were implemented, including a uniform locate requirement for short sales in all
equity securities and additional requirements for broker-dealers trading securities in which a substantial amount of failures to deliver
have occurred (Regulation SHO Threshold Securities). Please refer to Head Trader Alerts #2004-108, #2004-155, #2004-166 and
#2004-168.
The Securities and Exchange Commission (SEC) has amended Regulation SHO to eliminate the grandfather provision
effective October 15, 2007. Please refer to Regulatory Alert #2007-086 for complete details.
On January 2, 2007, a Regulation SHO Threshold List for NASDAQ and OTCBB stocks was not published on NASDAQTrader.com.
As a result, certain original published Regulation SHO Threshold/NASD 3210 Lists listed below have been modified. Please review
General News 2007-022 for complete details.
As announced in General News Item #2005-005, Wednesday, April 13, 2005, was the last day that NASDAQ posted a separate
addendum to the Threshold List in order to identify the additional OTC securities subject to Regulation SHO.

Regulation SHO Pilot List

The SEC issued a final rule amending its short sale price test. The rule eliminated the Rule 10a-1 tick test as well as the short-sale
price tests of any self-regulatory organization, including NASDAQs Rule 3350 bid test. NASDAQ eliminated short-sale validation on
July 6, 2007.
The SEC rule also removed the Regulation SHO requirement that a broker-dealer mark a sell order short exempt if the seller is
relying on an exemption from a price test.

NASDAQ maintained the list for the Reg SHO price test change until October 4, 2007. Effective October 5, 2007, broker-dealers
are no longer permitted to mark sales short exempt; instead all short sales must be marked short.
For the latest information, please see Regulatory Alert #2007-103.

Short Sale Volume and Transaction Reports

Overview
NASDAQ OMX publishes two types of short sale files based on the trading activity on the NASDAQ and BX market systems:

The Daily Short Sale Volume Files will reflect the aggregate number of shares executed on the NASDAQ and BX markets
during regular trading hours. At the security level, NASDAQ OMX will show the volume for executed short sale trades as well
as the total trading volume for both NASDAQ and BX markets. Because NASDAQ and BX market participants may trade all
U.S. exchange-listed securities, the file will include short sale data for NASDAQ-, NYSE- and regional exchange-listed
securities.

The Monthly Short Sale Transaction Files will provide a trade-by-trade record of all short sales executed on the NASDAQ
and BX execution systems and reported to a consolidated tape in NASDAQ-, NYSE-, and regional exchange-listed securities.
Within these files, NASDAQ OMX will provide trade details including the transaction time, price and number of shares for
every short sale transaction.

Benefits & Features

The NASDAQ Daily Short Sale Volume and Monthly Short Sale Transaction Reports are designed to:

Foster better market transparency and help to bolster investor confidence in the U.S. securities markets.

Enable investors and traders to see the level of short sale activity in the NASDAQ and NASDAQ OMX BX markets for
NASDAQ-, NYSE-, and regional exchange-listed securities.

Access Options
For each file, NASDAQ OMX will post a separate file for the NASDAQ and BX markets:

The NASDAQ OMX Short Sale Files are available for download via the public NASDAQ OMX Trader FTP site located at
Short Sale Data Files
For details on file formats, refer to the Short Sale File specifications document.
Please note that this is a different report from the Short Interest Report that is produced on a semimonthly basis and includes a
summary of the consolidated market short interest positions in all NASDAQ-listed securities. The enclosed Short Sale and
Short Interest Comparison document further highlights the differences between the two reports.