SEC Follow Up Exhibits Part C SEC_OEA_FCIC_001760-2501

security on each calendar day of the week, with a few exceptions, most notably
that no filing is required unless the value of the short sale exceeds $10,000,000. 2
2. Motivation for the Rule
4. The interim final temporary rule was motivated by a concern that “some persons
may manipulate the stock of issuers that have become temporarily weakened by
current market conditions.” 3 In particular, the rule notes that short selling may
exacerbate “unnecessary or artificial downward price movements.” 4
5. One of the anticipated benefits of the rule is that “the Form SH disclosure will
enable staff in our Office of Economic Analysis [“OEA”] and Office of
Compliance, Inspections, and Examinations to analyze short selling patterns and
use the data along with other information to study the impact of short selling on
the market in times of financial crisis.” 5
6. In particular, prior to the adoption of the rule, OEA staff had indicated that the
data from Form SH could be used to provide:
Basic information regarding the identities of short sellers. This data
allows us to answer, at least in part, the question, “Who is short selling
this security?” 6
2 No Form SH filing is required when no short sales occurred during the week, or when all short sales and
short positions are below the following thresholds: (a) The short sales and short positions are less than
0.25% of that class of the issuer’s section 13(f) securities issued, and (b) The fair market value of the short
sale and short position is less than $10,000,000.
3 Federal Register, Vol. 73, No. 202, October 17, 2008, page 61686
4 Federal Register, Vol. 73, No. 202, October 17, 2008, page 61686
5 Federal Register, Vol. 73, No. 202, October 17, 2008, page 61687
6 As noted by the exceptions to filing requirements above, our ability to identify shortsellers with these data
is limited to 13F filers with large short positions.
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SEC_OEA_FCIC_001874