Summary of SEC Emergency Order on Short-Selling Disclosure

This document is intended to be a summary of the SEC Release No. 58591 on September 18, 2008.  For the full SEC document, please go to the following link:  http://www.sec.gov/rules/other/2008/34-58591.pdf .  For the Edgar Form SH: http://www.sec.gov/about/forms/formsh.pdf

Who does this ruling pertain to?

  • An institutional manager that exercises discretion on accounts with at least $100,000,000 in FMV of 13(f) securities
  • An institutional manager that was required to file a form 13(f) for the quarter ended June 30, 2008

What will is required?

  • Filing a new form – Form SH

When is filing required?

  • 1st business day of every calendar week in which a short sale of a 13(f) stock was effective.  The rule is effective as of 09/22 and the filing is due on 09/29.  The rule terminates on 10/2 so unless it is extended the only filing due is on 09/29.

What is required on the form?

  • Number and value for each security sold short of 13(f) securities
  • Does not include short sale of options
  • For each day of the week, the following information must be submitted:
    • Name of Issuer
    • CUSIP
    • Short Position (Start of Day)
    • Number of Securities Sold Short (Per Day)
    • Value of Securities Sold Short (Per Day)
    • Short Position (End of Day)
    • Largest Intra-Day Short Position
    • Time of Day of Largest Intra-Day Short Position

Do All Positions Need To Be Reported?

  • Do not need to report position if the short position is less than 0.25% of issued 13(f) securities
  • And, The FMV of the position is less than $1,000,000

About Seth Berlin

Seth Berlin is Principal at Performance Thinking & Technologies (PTT). PTT is a consulting firm that focuses on operations, reporting, and risk management for hedge funds and investors. Seth has many years in the investment industry from an investment analyst, operational, and technology management perspective. He can be reached at www.p-t-t.com or at info@p-t-t.com.
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