The SEC have announced that it has voted to propose a new exchange rule, 13f-2, which will require certain institutional investment managers to report short sale related information to the commission on a monthly basis.
Managers that meet or exceed either (1) a gross short position in the equity security with a US dollar value of $10 million or more at the close of any settlement date during the calendar month, or (2) a monthly average gross short position as a percentage of shares outstanding in the equity security of 2.5% or more, would be required to report information to the SEC within 14 days after month end. Short sale data would be aggregated and made available to the public.
The proposal is one of many to be considered by the SEC this quarter, and part of a wider push to increase disclosures and transparency within the US market. This change would be considered one of the largest regulatory changes by the SEC in decades. This particular action is seen as part of the SECs response to the short sale craze of GameStop which saw the stock move from $5 in October 2020 to over $400 in January 2021, partly due to a short squeeze.
For a comprehensive overview of exactly what is in scope, consider the fact sheet shared by the SEC on the new proposed rule.
To find out how to comply with long and short disclosure obligations in 101 jurisdictions, book a demo or contact us.