In finance, a locate is an approval from a broker that needs to be obtained prior to effecting a short sale in any equity security, i.e. to "locate" securities available for borrowing.
The requirement, in the United States, to locate a stock before 'shorting' has existed for a long time.
However, it is not necessary to secure a locate in the same broker – if a short sale purchaser can prove a secured locate at any broker that is sufficient to provide validity of a short sales transaction.
These can be extremely dangerous to the market[citation needed]and can unnecessarily bring down prices.
Responding to such threat, in July 2008 SEC issued an emergency ruling where locates for certain securities had to be backed up by a guaranteed pre-borrow [1]