Reminder: SEC’s New Short Sale Reporting Filings Due February 2025

Compliance with the US Securities and Exchange Commission’s (SEC’s) new Rule 13f-2 is required as of January 2, 2025. Institutional investment managers whose short positions exceed a reporting threshold in the month of January 2025 must file a Form SHO by February 2025.

In October 2023, the SEC adopted Rule 13f-2 under the Securities Exchange Act of 1934 (Exchange Act), which requires certain institutional investment managers to file new Form SHO. The new rule and form will require institutional investment managers that meet certain thresholds to report short position data and short activity data relating to equity securities for accounts over which the institutional investment manager has investment discretion, including its own account.

For this purpose, “institutional investment manager” has the same meaning as it does for purposes of Form 13F.

The reporting thresholds triggering the need to file Form SHO with respect to equity securities registered pursuant to Section 12 of the Exchange Act or for which the issuer of that class of securities required to file reports pursuant to Section 15(d) of the Exchange Act (Reporting Company Issuer) are:

1. a monthly average gross short position at the close of regular trading hours in the equity security with a US dollar value of $10 million or more; or
2. a monthly average gross short position at the close of regular trading hours as a percentage of shares outstanding in the equity security of 2.5% or more.

For short sales relating to a non–Reporting Company Issuer, the reporting threshold is a gross short position in the equity security with a US dollar value of $500,000 or more at the close of regular trading hours on any settlement date during the calendar month.

Form SHO is required to be filed within 14 days after the end of a month in which a reporting threshold is met.

For more information, please see our previous LawFlash on Rule 13f-2.

NEXT STEPS

Investment managers should ensure that they have systems in place to (1) track their gross short positions in a manner that allows them to determine whether they are required to file Form SHO and (2) accurately compile the information that is required in Form SHO, if applicable.