I was sent a message from my equities broker informing me that some of my shorts may have to eb closed out by force after 3 business days. Does this imply that my broker has been engaging in naked short selling? What do these new SEC rules mean? Quote from broker: We also know that some of you apply short selling to your trading strategies so we wanted to alert you to new requirements adopted yesterday by the Securities and Exchange Commission (SEC). The SEC expressed concern "about the possible unnecessary or artificial price movements based on unfounded rumors regarding the stability of financial institutions and other issuers exacerbated by "naked" short selling." SEC Release No. 34-58572. In order to allay some of these concerns, the SEC imposed enhanced delivery requirements on short sales of equity securities. What this means for you is that if you sell an equity security short, and you fail to cover the short position by settlement date (Trade Date + 3), we may have to buy in your position no later than the beginning of the regular trading hour of the next business day (T + 4). Any losses suffered or lost opportunities realized as a result of our actions will be your financial responsibility. We strongly recommend that you read the SEC Release and Rule <http://www.sec.gov/news/press/2008/2008-204.htm> and incorporate the limitations associated with this new rule into your trading strategies and decisions.