The Financial Industry Regulatory Authority (FINRA) has issued Regulatory Notice 08-50 to clarify the procedures for submitting written attestation of bona fide market making relating to fail-to-deliver positions. On September 17, the Securities and Exchange Commission issued an Emergency Order adopting a temporary rule to Regulation SHO, Rule 204T, which generally provides that if a participant of a registered clearing agency has a fail-to-deliver position at a registered clearing agency in any equity security for a long or short sale transaction in that equity security, the participant shall, by no later than the beginning of regular trading hours on the settlement day following the settlement date of the transaction that resulted in the fail-to-deliver position, immediately close out the fail-to-deliver position by borrowing or purchasing securities of like kind and quantity. Registered Market Makers conducting bona fide market making activity that qualify for an extension are permitted to close out the fail-to-deliver position attributable to the market maker by no later than the beginning of regular trading hours on the morning of the third settlement day after the settlement date for the transaction that resulted in the fail-to-deliver position. To qualify for the extension, the market maker must attest in writing to the market on which it is registered that the fail-to-deliver position was established solely for the purpose of meeting its bona fide market making obligations and describe the steps it has taken to deliver the securities.

Completed attestations must be faxed to FINRA Operations by the close of business on the settlement day following the original settlement date of the transaction(s).

http://www.finra.org/web/groups/industry/@ip/@reg/@notice/documents/notices/p117089.pdf