by:Investment Management Practice
As a follow-up to the emergency order it issued in September, the Securities and Exchange Commission (SEC) has issued an interim final rule requiring institutional investment managers to file Form SH to report their short sales. The new rule takes effect October 18, 2008 and expires on August 1, 2009. While the rule generally codifies the SEC’s earlier emergency order (Release 34-58591) and related guidance from the SEC staff, the interim rule and the SEC’s release modify certain aspects of the requirements under the emergency order. In particular, the SEC has provided additional time to submit Form SH and has raised the threshold reporting level. On the other hand, managers are now required to report pre–September 22, 2008 short positions.
We have updated our Q&As regarding the Form SH requirements. Differences between the interim rule and the emergency order are indicated by an asterisk in the question title.
The interim final rule (Release 34-58785) mandates that every institutional investment manager that exercises investment discretion over accounts holding Section 13(f) securities, and that has filed or was required to file a Form 13F for the calendar quarter, file a Form SH disclosing specified information about securities sold short during the preceding week. Managers subject to the reporting requirement include both SEC-registered and unregistered managers that exercise investment discretion over $100 million or more of the broad group of equity securities described in Section 13(f) of the Securities Exchange Act of 1934.
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