Short position reporting; exception from locate requirement for bona-fide market making (December 4, 2024)
Dear FIF Members,
FIF has scheduled a call for the Short Sales / Reg SHO / Short Reporting Working Group for Wednesday December 4 at 10 am ET. Below are the agenda items for this call.
- Update on December 2 call with SEC staff
- Requirement to calculate gross short position without netting of accounts with long positions
- Wording of rule and adopting release
- Desire to be consistent with FINRA short interest reporting
- “As a result of short sales”
- Note from FIF member: “SEC stated that Firms should report short positions even if the result of a long sale (similar to FINRA 4560). SEC said short positions are ‘generally’ the result of short sales, but a long sale that results in a short position is reportable. The language around ‘as a result of short sale’ was redundant and shouldn't be read in a way that limits the position reporting to short sales only.”
- Maximum number of securities for Tables 1 and 2
- Stock splits and other corporate events
- Requirement to reference EDGAR data for shares outstanding
- SEC will not grant exemptive relief while litigation is outstanding
- Requirement to calculate Threshold A percentage for derivative security (for example, ADR) based on the outstanding shares of the derivative security and not the underlying
- Requirement to calculate gross short position without netting of accounts with long positions
- Issues and questions from FIF members (see attached)
- Extended trading hours
- Reporting scenario where book changes from negative to positive
- Review changes to Technical Specification
- To access the Technical Specification, go to the SEC Technical Specifications webpage, search for “Form SHO”, and click on “full specs”
- netChangeOfShares (p. 9 of PDF)
- Increase of Table 1 and Table 2 max occurrences from 100 to 1,000 (p. 11 of PDF)
- Adding issuer and security fields for Table 2 (p. 11 of PDF)
- Clarification on issuerCusip field (p. 11 of PDF)
- Requirement for Table 2 fields to match Table 1 fields (p. 14 of PDF)
- Discuss FIF member question on exception from locate requirement for bona-fide market making activity (see attached)
Please send an email to fifinfo@fif.com with any questions or suggestions.
Best Regards,
FIF
