Published on Feb 28th, 2022 |

Brief Introduction

On Friday, February 25th, the SEC announced the release of proposed Rule changes to Short Sale Disclosures, Order Making Requirements, and CAT Amendments.

4 Takeaways on the Proposed Rule Changes

  1. The goal of the Proposed Rule Changes are to provide investors and regulators with greater transparency by increasing public availability of short sale related data. Proposed Rule 13f-2 would provide more visibility into the behavior of large short sellers.
  2. The Commission also voted on Regulation SHO, Rule 205, focusing on a new “buy to cover” order making requirement for Broker Dealers.
  3. CAT amendments focused on Firms having to report “buy to report” information to CAT and for each CAT reporting firm to indicate where it is asserting use of the bona fide market making exception under Regulation SHO.
  4. Exchange Act Rule 10c-1 was voted on by the Commission to reopen the comment period (ended on January 7th, 2022) in light of Proposed Rule 13f-2.

 

Final Conclusion

The Proposed Rule 13f-2 and Form SHO would require institutional money managers to file on a monthly basis to the Commission via EDGAR.

The trend continues from the SEC in 2022 on protecting investors, and this is a continuation of that providing significant visibility publicly of short selling activities and identify potentially abusive trading practices.

At Vigilant, we have over 300+ years of experience uniting Regulatory Compliance, Legal, and Financial Expertise. If you need assistance, or would like to learn more about Vigilant, please click the contact us here.