New SEC Rule on Short Selling: Key Filing Requirements and Deadlines for Form SHO

Institutional investment managers with significant short positions face new compliance hurdles as the U.S. Securities and Exchange Commission (SEC) rolls out its enhanced short sale reporting rules under Rule 13f-2.

Starting January 2, 2025, managers holding short positions exceeding $10 million or 2.5% of a company’s shares must file Form SHO on a monthly basis. This measure is designed to increase transparency in short selling, helping regulators and investors better detect market manipulation and mitigate systemic risks.

Short selling activities are often less transparent than long positions, making it difficult for investors and regulators to detect potential market manipulation. At times, this lack of insight has led to situations that destabilize the market. The increased transparency the new Form SHO reporting provides should make it easier to detect market manipulation as well as protect against systemic risks that could destabilize the market.

Reporting requirements

Institutional investment managers will be required to file Form SHO within 14 days of the end of each month if they have a short position in a stock that exceeds $10 million or 2.5% of a company's total outstanding shares. This applies to stocks of companies that are registered with the SEC, or required to file reports with the SEC, as well as other stocks. 

The report must include the manager's total short position in the stock at the end of the month, as well as their net activity (including options) in the stock on each settlement date during the month.

According to the new rule, the SEC will publish some of this data, such as the total short interest and net activity across all managers for each stock. 

Form SHO

Form SHO has two parts: a cover page with the reporting company’s information, and tables with short position data. 

The cover page will include identifying information about the manager filing the Form SHO report.

Table 1, or the Manager's Gross Short Positions, will show the gross short position in each security at the end of the month.

Table 2, or the Daily Activity Affecting Manager's Gross Short Position, will show how the gross short position in each security changed during each trading day of the month. 

Each table will include: 

• The name of the eligible security
• End of month gross short position information
• Daily trading activity that affects a manager’s reported gross short position for each settlement date during the calendar month reporting period

Who must file Form SHO?

A Form SHO will need to be completed by institutional investment managers that meet either of the following criteria: 

Any equity security of an issuer that is registered pursuant to Section 12 of the Exchange Act or an issuer that is required to file reports pursuant to section 15(d) of the Exchange Act in which the manager meets or exceeds either:

1. A monthly average gross short position in the equity security of a U.S. dollar value of $10 million or more at the close of regular trading hours during the calendar month, or representing 2.5% of the shares outstanding
2. For equity securities of other issuers (non-reporting companies), a gross short position with a U.S. dollar value of $500,000 or more at the close of any settlement date during the calendar month

How we help

ACA’s dedicated filings managed services team can support your firm’s U.S., UK, and EU filing needs, including Form SHO Our team can ensure an accurate and timely submission by: 

• Providing a Form SHO template for data collection 
• Confirming all short position holdings are accurately represented 
• Generate draft(s) reports for client approval 
• Submit and confirm submission of Form SHO within the 14-day window 
• Answer client queries about the intricacies of Form SHO 

Reach out to your ACA consultant or contact us to learn how ACA can help you launch, grow, and protect your firm.