Institutional Investments Managers who file on Form 13F have yet another new SEC filing requirement, Form SHO, to report their short positions. In the past two years, the SEC has expanded new reporting requirements for 13F filers including reporting their say on pay votes on Form N-PX and 13F confidential treatment requests In January 2024, the SEC adopted new Rule 13f-2 and Form SHO along with a related amendment to the national market system Consolidated Audit Trail (“CAT”) to provide greater transparency of short sale-related data for both the SEC and the market.
- Under Rule 13f-2, institutional investment managers (“Managers”) that meet or exceed specific reporting thresholds will report short position and short activity data for equity securities on the new confidential EDGAR form type SHO.
- Form SHO must be filed within 14 calendar days after the end of each calendar month.
- The SEC will aggregate and publish data collected from Form SHO filings with a one-month delay.
Reporting Threshold
Managers are required to report the short positions they hold in applicable equity securities that are registered under the Exchange Act. The triggering reporting thresholds are:
- a monthly average of daily gross short positions at the close of regular trading hours in the equity security with a U.S. dollar value of $10 million or more, or
- a monthly average of daily gross short positions at the close of regular trading hours as a percentage of shares outstanding in the equity security of 2.5 percent or more
Form SHO Details
Form SHO will be filed confidentially on the EDGAR system, due to the sensitivity of the short position data. Filers can submit a Notice Report, Entries Report, or Combination Report. Similar to existing 13F and N-PX filings, Form SHO will be required to file in XML format which includes specific checkboxes and numeric and text fields. The SEC has increasingly adopted structured data, including XML and Inline XBRL. Structured data provides improved disclosures by validating the information reported and allows for greater analysis and comparison by regulators and investors.
The form consists of the cover page and two information tables. The SEC will be releasing EDGAR technical specifications before the compliance date that will provide the technical details necessary to submit a filing.
- The Cover Page requires filers to provide certain basic information such as their name, mailing address, business telephone number and business email, as well as the name and title. The Manager will also provide its non-lapsed Legal Entity Identifier (“LEI”) if it has one. Once filed, the EDGAR system will generate an HTML cover page based on this information.
- If other Managers are required to be listed in the “Other Manager(s) Reporting for this Manager” section of the Cover Page, the Manager will also be required to include the name and non-lapsed LEI of each such “Other Manager” listed, if the LEI of such “Other Manager(s)” is available.
- For each individual equity security reported in the Information Tables of Form SHO, Managers will report the following information, similar to 13F-HR and N-PX filings:
- the issuer’s name and LEI if it has one
- the equity security’s title of class
- CUSIP
- Financial Instrument Global Identifier (“FIGI”) (if any)
Form SHO Information Table 1
- Information Table 1: report the number of shares of the reported equity security that represent the Managers’ gross short position at the close of the last settlement date of the calendar month reporting period, as well as the corresponding U.S. dollar value of this reported gross short position.
Information Table 1 – Manager’s Monthly Gross Short Position
| Column 1 | Column 2 | Column 3 | Column 4 | Column 5 | Column 6 | Column 7 | Column 8 |
|---|---|---|---|---|---|---|---|
| Settlement Date (Month End) | Issuer Name | Issuer LEI | Title of Class | CUSIP Number | FIGI | End of Month Gross Short Position (Number of Shares) | End of Month Gross Short Position (rounded to nearest USD). |
Form SHO Information Table 2
- Information Table 2: for each reported equity security, for each individual settlement date during the calendar month reporting period, a Manager will report “net” activity in the reported equity security.
Information Table 2-Daily Activity Affecting Manager’s Gross Short Position During the Reporting Period
| Column 1 | Column 2 | Column 3 | Column 4 | Column 5 | Column 6 | Column 7 |
|---|---|---|---|---|---|---|
| Settlement Date | Issuer Name | Issuer LEI | Title of Class | CUSIP Number | FIGI | Net Change in Short Position (Number of Shares). |
Form SHO Amendments
If a manager determines that an amendment to a filed Form SHO is required, then they need to “refile the Form SHO in its’ entirety within 10 calendar days of the discovery of an error.“ The Form SHO instructions document the specific requirements:
- check the “Amendment and Restatement” box on the Cover Page; and enter the amendment number.
- Each Amendment and Restatement must include a complete Cover Page and Information Tables. Amendments must be filed sequentially.
Compliance Timing:
The final rule is effective January 2, 2024, and the compliance begins, one year after the effective date: January 2, 2025. Form SHO is due within 14 calendar days after the end of each month.
The SEC will begin posting publicly aggregated data approximately three months after the compliance date.
How Toppan Merrill Can Help
For 55+ years, the dedicated SEC reporting experts at Toppan Merrill have supported issuers navigating the regulatory disclosure and filing process. Connect with one of our experts at [email protected] or by calling 800.688.4400.
