Solve for the SEC’s new 13f-2 reporting risk with one-click connectivity
16 August 2022
S3’s new tool offers one-click compliance and connectivity for proposed daily and monthly short selling reporting requirements
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Background: here comes reporting risk
On 25 February 2022, the US Securities and Exchange Commission (SEC) announced a new short sale disclosure rule that requires institutional investment managers to report short sale related information to the SEC on a monthly basis. Daily trading activity that affects an investor’s gross short position for each date of settlement must also be reported.
To help investors prepare, S3 Partners has developed a new 13f-2 reporting and monitoring dashboard that allows funds to monitor and file all positions daily with one click of a button.
As it stands today: how the new rule impacts investors
Within 14 calendar days after the end of each calendar month, investors will be required to report and file the following information via EDGAR:
• Any equity security of an issuer that is registered pursuant to Section 12 of the Exchange Act
• Any equity security for which the issuer is required to file reports pursuant to section 15(d) of the Exchange Act in which the manager has a gross short position greater than or equal to US$10 million or a monthly average gross short position greater than or equal to 2.5 per cent of shares outstanding
• For any equity security of an issuer that is not a reporting company issuer as described above, managers are required to report when a gross short position is greater than or equal to US$500,000 at the close of any settlement date during the calendar month
Managers are required to report:
• 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
What’s next?
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, and 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 has always been an innovative force in data analytics and workflow solutions and our goal has been to show how quickly we will help clients and the broader industry. Forty-eight hours after the SEC released details of the new 13f-2 rule, we were ready to solve this headache for hedge funds, asset managers and allocators.
Rule 13f-2 was open for public comment for a period of 60 days from 25 February. In the meantime, S3 is offering its new reporting tool complimentary to help managers better prepare for this seismic shift in reporting. Buy-side market participants can plug their current portfolio holdings into the S3 dashboard to gain instant 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 with one click of a button.
On 25 February 2022, the US Securities and Exchange Commission (SEC) announced a new short sale disclosure rule that requires institutional investment managers to report short sale related information to the SEC on a monthly basis. Daily trading activity that affects an investor’s gross short position for each date of settlement must also be reported.
To help investors prepare, S3 Partners has developed a new 13f-2 reporting and monitoring dashboard that allows funds to monitor and file all positions daily with one click of a button.
As it stands today: how the new rule impacts investors
Within 14 calendar days after the end of each calendar month, investors will be required to report and file the following information via EDGAR:
• Any equity security of an issuer that is registered pursuant to Section 12 of the Exchange Act
• Any equity security for which the issuer is required to file reports pursuant to section 15(d) of the Exchange Act in which the manager has a gross short position greater than or equal to US$10 million or a monthly average gross short position greater than or equal to 2.5 per cent of shares outstanding
• For any equity security of an issuer that is not a reporting company issuer as described above, managers are required to report when a gross short position is greater than or equal to US$500,000 at the close of any settlement date during the calendar month
Managers are required to report:
• 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
What’s next?
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, and 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 has always been an innovative force in data analytics and workflow solutions and our goal has been to show how quickly we will help clients and the broader industry. Forty-eight hours after the SEC released details of the new 13f-2 rule, we were ready to solve this headache for hedge funds, asset managers and allocators.
Rule 13f-2 was open for public comment for a period of 60 days from 25 February. In the meantime, S3 is offering its new reporting tool complimentary to help managers better prepare for this seismic shift in reporting. Buy-side market participants can plug their current portfolio holdings into the S3 dashboard to gain instant 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 with one click of a button.
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