Institutional investment managers, including venture and private equity funds and other institutional investors, that engage in the short selling of equity securities should be mindful of the Securities and Exchange Commission’s new short position reporting requirements under Rule 13f-2. After a one-year extension of the compliance deadline, these reporting requirements go into effect in January 2026, with the initial filings due on February 17, 2026.
The SEC adopted Rule 13f-2 and related Form SHO under the Securities Exchange Act of 1934 to increase transparency around gross short positions and short sale activity of institutional investment managers. Under Rule 13f-2, institutional managers that meet or exceed specific short interest thresholds in publicly traded equity securities must report monthly data on their short positions on Form SHO.
Form SHO filings will be submitted electronically via the SEC’s Electronic Data Gathering, Analysis, and Retrieval (EDGAR) filing system. However, unlike other filings required of institutional investors, Form SHO filings will be confidential. The SEC will aggregate the data from Form SHO and publish this aggregate information, by security, making the aggregate information available to all market participants.
Form SHO triggering events and disclosure requirements
Under Rule 13f-2, investment managers will be required to file Form SHO if either of the following thresholds is met for a given equity security during a calendar month:
- A monthly average gross short position of $10 million or more; or
- A monthly average gross short position representing 2.5% or more of the issuer’s outstanding shares.
If triggered, Form SHO will require detailed information about short equity positions for which either of the above thresholds has been met, including:
- Gross short position (in shares and dollar value) as of the end of the month; and
- Daily activity data showing net changes in the gross short position for each day of the month.
Filing deadline
If a Form SHO is triggered for a particular month, the filing will be due within 14 calendar days after the end of the calendar month. Due to the weekend and holiday schedule, a filing triggered for January 2026 will be due on February 17, 2026.
What investors should do now
Investment managers who engage in short-selling activities should ensure that their internal reporting infrastructure is capable of collecting and computing detailed short position data across their advised funds and accounts. Firms that engage in significant short exposure should prioritize compliance planning. Additionally, managers should communicate with their legal and compliance advisors to ensure they are in a position to evaluate whether a filing has been triggered and prepare and submit these filings on a timely basis.
The authors
