The SEC is targeting for better visibility into the activities of large short sellers, whereby new institutional asset managers will be obliged to report short sales-related data to the SEC on a monthly basis.
Fund management companies will be required to file gross short positions greater than or equal to US$10 million or monthly average gross short positions greater than or equal to 2.5 per cent (as a percentage of shares outstanding).
Funds will also be required to file daily trading activity that affects a manager's reported gross short position for each settlement date during the calendar month reporting period.
Bob Sloan, managing partner and CEO of S3 Partners, says: "This new rule from the SEC represents a massive shift in how buy-side participants will have to monitor and file short positions. The rule introduces a whole new regulatory requirement and risk on asset managers.
“S3 is an innovative force in data analytics and workflow solutions, and our goal was to show how quickly we will help clients and the broader industry. 24 hours after the SEC released details of the 13F-2 rule, we are ready to solve this headache for hedge funds, asset managers and allocators.”
Commenting on the announcement Sat Bhattacharya, chief technology officer of S3, adds: "The end goal of the SEC's new rule is transparency, which is an outcome that will benefit all market participants. However, the reporting requirements to get to this market transparency will be extremely onerous for fund management companies.”
S3 is offering the tool complimentary to help managers better prepare for this shift in reporting. Buy-side market participants can plug their current portfolio holdings into the S3 dashboard to gain transparency and education regarding their exposure to 13F-2 filing requirements.
When the new 13F-2 rule is live, users will also be able to file directly to the SEC's EDGAR system.
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