I know that there have been many discussions about short selling on this forum and I thought you may be interested in reading this closing comment from VRtrader and SEC's action to do away with this practice.

The SEC also acted today to do away with 'naked' short selling. The following is a summary of their actions: Hard T+3 close-out requirement; penalties for violation include prohibition of further short sales, mandatory pre-borrow. The Commission adopted, on an interim final basis, a new rule requiring that short sellers and their broker-dealers deliver securities by the close of business on the settlement date (three days after the sale transaction date, or T+3) and imposing penalties for failure to do so. The Commission approved a final rule to eliminate the options market maker exception from the close-out requirement of Rule 203(b)(3) in Regulation SHO. This rule change also becomes effective five days after publication in the Federal Register. As a result, options market makers will be treated in the same way as all other market participants, and required to abide by the hard T+3 closeout requirements that effectively ban naked short selling. The Commission adopted Rule 10b-21, which expressly targets fraudulent short selling transactions. The new rule covers short sellers who deceive broker-dealers or any other market participants. Specifically, the new rule makes clear that those who lie about their intention or ability to deliver securities in time for settlement are violating the law when they fail to deliver. This new rule is effective immediately.