Investment Management and Financial Markets Group
September 19, 2008
SEC Issues Emergency Rule Requiring
Short Sales to be Reported on Form SH
This client alert was updated on September 23 to reflect amendments the SEC made to its Emergency
Order on Form SH. Please see the italicized text below for the updates to the original client memo.
In response to recent extraordinary events, the Securities and Exchange Commission (SEC) issued an
Emergency Order requiring certain “institutional investment managers” to file a new Form SH with the SEC
detailing their short selling activities. This requirement applies to institutional investment managers who exercise
investment discretion over accounts holding Section 13(f) securities having an aggregate fair market value on the
last trading day of any month of any calendar year of at least $100 million. Specifically, an institutional
investment manager who has filed or was required to file a Form 13F for the calendar quarter ended June
30, 2008, under Section 13(f) of the Exchange Act and Rule 13f-1(a) will be required to file a report on new
Form SH with the SEC on the first business day of every calendar week immediately following a week in
which it effected short sales.
Form SH, which must be filed electronically on the SEC’s EDGAR system, but which will not be publicly
available until two weeks after the due date for Form SH, must include information on each Section 13(f)
security (other than options) sold short for each calendar day of the prior week, including:
•
the number and value of securities sold short,
•
the opening short position, closing short position and largest intraday short position, and
•
the time of the largest intraday short position.
No filing, however, will be required when no short sales of a Section 13(f) security have been effected since the
previous filing of a Form SH. In addition, this disclosure requirement will only apply to short sales effected after
September 22, 2008 (thus, the first Form SH is required to be filed on September 29, 2008). Finally, an
institutional investment manager is not required to report short positions if: (i) the short position in the Section
13(f) securities constitutes less than 0.25 of 1% of the class of the issuer’s outstanding Section 13(f) securities (as
reported on the issuer’s most recent annual, quarterly or current report filed with the SEC, unless the investment
manager knows or has reason to believe that information is not accurate); and (ii) the fair market value of the
short position in the Section 13(f) securities is less than $1 million. The Emergency Order terminates on
October 2, 2008, unless further extended by the SEC.
A copy of Form SH is available on the SEC’s Web site at http://www.sec.gov/about/forms/formsh.pdf.
We will keep you posted on any new developments that arise in these interesting times.
For further information, please contact Cheryl Allaire 858-509-7424, Cameron Avery 312-807-4302,
Kevin Bettsteller 312-807-4442, Paul Dykstra 312-781-6029, David Glatz 312-807-4295, Alan Goldberg 312-807-4227,
Mark Greer 312-807-4393, Elizabeth Hudson 312-807-4376, Stevens Kelly 312-807-4240, Anna Paglia 312-781-7163,
Joanne Phillips 202-955-6824, Paulita Pike 312-781-6027, Eric Purple 202-955-7081, Bruce Rosenblum 202-955-7087,
Donald Weiss 312-807-4303, Gwendolyn Williamson 202-955-7059, or Stacy Winick 202-955-7040 of Bell, Boyd & Lloyd’s
Investment Management and Financial Markets Group or visit our Web site at www.bellboyd.com.
This publication has been prepared by the Investment Management and Financial Markets Group of Bell, Boyd & Lloyd LLP
for clients and friends of the firm and is for information only. It is not a substitute for legal advice or individual analysis of a
particular legal matter. Readers should not act without seeking professional legal counsel. Transmission and receipt of this
publication does not create an attorney-client relationship.
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