Alerts

SEC Adopts New Short Sale Rules

September 18, 2008

Yesterday, the Securities and Exchange Commission (the “Commission”) announced three changes to the short sale rules: (1) a hard T+3 close-out requirement; (2) a new anti-fraud rule addressing deceptive conduct in connection with abusive short selling; and (3) elimination of the options market-maker exception to Regulation SHO. Each of these changes is described in detail below.

Also yesterday, SEC Chairman Christopher Cox announced that the Commission will consider, on an emergency basis, a new disclosure rule that would require hedge funds and other large investors to disclose their short positions in order “to ensure transparency in short selling.” The disclosure requirement under consideration would subject managers with more than $100 million invested in securities to public reporting of their daily short positions. We will keep you apprised of any developments with respect to this potential new reporting requirement.