Series 7 Exam Question 264: Answer and Explanation

Question: 264

Regulation SHO covers the

• A. resale of restricted securities
• B. short sale of securities
• C. resale of ETFs
• D. margin requirement for listed options

Correct Answer: B

Explanation:

B. Regulation SHO covers the short sale of securities. According to Regulation SHO, all order tickets must be marked as short sale (as compared to long sale). In addition, brokerage firms must establish rules to locate, borrow, and deliver securities that are to be sold short.