SEC Does Not Renew Form SH

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In its press release, the Commission announced that instead of renewing Rule 10a-3T, it is working with several self-regulatory organizations (“SROs”) to “substantially increase the public availability of short sale-related information through a series of other actions.” The three specific initiatives identified by the SEC are:

1. The daily publication by the SROs on their websites of aggregate short-selling volume in each individual equity security for that day;
2. The publication by the SROs on their websites, on a one-month delayed basis, of information regarding individual short sale transactions in all exchange-listed securities; and
3. The publication by the Commission on its website twice monthly of data on “fails to deliver” for all equity securities regardless of the fail levels.

The SEC believes the above efforts will substantially increase the public availability of short sale-related information above what is currently required to be disclosed on Form SH (which applies only to certain institutional money managers and does not require public disclosure).

How does this impact my Form SH filing?
The last Form SH filing will be due on July 31, 2009, reporting short sales and short positions from Sunday, July 19, 2009, through Saturday, July 25, 2009.

What about amended filings?
To the extent that amendments need to be made to Forms SH filed prior to the expiration of the rule, we believe the obligation to amend those filings is an ongoing obligation which does not expire even though the rule has expired. Accordingly, amendments to previously-filed Forms SH should be filed promptly. The foregoing statements are contingent on the SEC keeping the Form SH/A on the Edgar filing system.

Will the SRO disclosure include a de minimis requirement for reporting of short positions?
Self-regulatory agencies such as the Financial Industry Regulatory Authority will publish “individual short-sale transactions in all exchange-listed equity securities,” the SEC said yesterday. Based upon the SEC release, it does not appear that the disclosures will include names of investors engaging in the short selling and will be posted a month after the transactions occur. Accordingly, based on the information provided thus far by the SEC, the required disclosures to be made on the SRO websites does not appear to include a de minimis requirement.

Read the full release from the SEC here.

Additional Resources:
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