The Securities and Exchange Commission (SEC) has adopted Rule 13f-2, a new rule to make short sale related data more publicly available, thus providing investors with greater transparency. According to a press release from the authority, institutional investment managers that “meet or exceed certain thresholds” will be required to report “specified short position data and short activity data for equity securities”.
The commission will then aggregate the resulting data and disseminate it on a delayed basis to supplement the short sale data that is currently publicly available. Confidentiality will be maintained for the reporting investment managers.
SEC has revealed that the new rule was motivated by a mandate from the congress to enhance the transparency of the short selling of equity securities after the 2008 financial crisis. SEC chair Gary Gensler believes that such a rule is especially relevant “in times of stress or volatility”, when “it’s important for the commission and the public to know more about short sale activity in the equity markets”.
Rule 13f-2 will become effective 60 days after the publication of its adopting release in the Federal Register. The compliance date is 12 months after the effective date.