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Changes to Section 13 & Short Sale Requirements | FundApps

2 mins
Posted on Mar 3 2022 by Liam Driscoll

Discover more about the new, proposed changes to Section 13 and the beneficial ownership and short-selling by the SEC from head of FundApps North America.

In what has been a busy 2022 for the SEC, investors will soon likely face shorter timelines and increased frequency for Section 13G and 13D disclosures, as well as grapple with the introduction of the first US short-selling requirements. 

Dave Polonsky, Head of FundApps North America, gives an overview of the changes, what they mean, and what's next, below:

Beneficial Ownership Reporting

On February 10th, the SEC Proposed rule amendments to the Exchange Act Sections 13(g) and 13(d) that will subsequently change reporting obligations for investors. These proposals will be up for consultation for the next 60 days. In scope are both timelines and volume - reporting from 45 days after year-end to 5 days after month-end for 13(g) for qualified institutional investors. For 13(d), proposed timelines would drop from 10 days after acquiring beneficial ownership of more than 5% or losing eligibility to file 13(g), down to 5 days. A full review of the proposed changes can be found here - SEC Proposes Amendments to 13G and 13D Beneficial Ownership Reporting

Short Sale Disclosures

Not long after on February 25th, the SEC announced a new proposed exchange rule, 13f-2, that would require institutional investment managers to report aggregated holdings to the commission on a monthly basis.  Short positions (1) in excess of $10 million dollars at settlement, as well as  (2) monthly average gross short positions as a percentage of shares outstanding in the equity security of 2.5% or more, would be reportable under the unanimously backed proposed rule by the SEC. For additional information, including the SEC provided Fact Sheet, see SEC Proposes Short Sale Disclosure Rule.

"Proposed Rule 13f-2 would make aggregate data about large short positions available to the public for individual equity securities. This would provide the public and market participants with more visibility into the behaviour of large short sellers. The raw data reported to the Commission on a new Form SHO would help us to better oversee the markets and understand the role short selling may play in market events. It's important for the public and the Commission to know more about this important market, especially in times of stress or volatility." - Gary Gensler, SEC Chair


Finding it hard to keep up with all the changes? We've summarised everything you need to know about the SEC's proposed changes. Read it here.