U.S. SEC again delays implementation of controversial short-selling disclosure rule

BlockBeats reports that on December 4, the U.S. Securities and Exchange Commission (SEC) postponed for the second time the deadline for the highly anticipated short selling and related securities lending disclosure rules. According to SEC guidance, the final deadline for large investment management institutions (including hedge funds) to comply with short selling reporting requirements has been delayed to January 2, 2028, and the disclosure obligations for securities lending transactions have been postponed to September 28, 2028. The SEC stated: “The Commission believes these temporary exemptions are in the public interest and consistent with investor protection objectives.” In October 2023, the SEC introduced new regulations requiring eligible asset managers to report short position data monthly. Pension funds, banks, and institutional investors that lend out their held stocks must submit reports on the following trading day. In August, the U.S. Fifth Circuit Court of Appeals ruled that the SEC failed to adequately assess the economic impact when formulating the rules and required the agency to reassess. The SEC’s only Democratic commissioner, Crenshaw, stated: We are using the extension of compliance dates as a pretext to mask a new trend: continuously distorting rules until they become ineffective, which is eroding the foundations of the rule of law. (Jin10)