US SEC Implements Stricter Reporting Requirements for Short Sellers

The US Securities and Exchange Commission (SEC) has approved new rules aimed at increasing transparency in short selling, requiring investors to report their short positions to the agency and companies that lend out shares to report the activity to the Financial Industry Regulatory Authority (FINRA). Short selling, the practice of betting against stocks, has drawn renewed scrutiny following the GameStop saga, where retail investors drove up the price of shares, causing heavy losses for hedge funds. The SEC's new rules aim to enhance its ability to police short selling and will require institutional investors to report gross short positions monthly and certain "net" short activity for individual trade settlement dates. FINRA will publish most of the reported data on an aggregate anonymized basis, with a 20-business-day delay for loan amounts.