On August 25, 2025, the 5th U.S. Circuit Court of Appeals sent two newly adopted rules under the Securities Exchange Act of 1934 back to the SEC for further assessment of the costs and benefits. Rule 13f-2 requires institutional investment managers exercising investment discretion over short positions meeting specified thresholds to report on Form SHO information relating to end-of-the-month short positions and certain daily activity affecting such short positions. The SEC would then publish aggregated information regarding short sale activity reported on Form SHO. Rule 10c-1requires daily reporting to FINRA and subsequent public dissemination of information on covered securities loans. Both rules were adopted in October 2023 under former Chairman Gensler to increase transparency of short selling and related market lending practices by hedge funds and other market participants. However, in 2024, the National Association of Private Fund Managers, the Managed Funds Association, and the Alternative Investment Management Association challenged the rules on multiple grounds, arguing that the rules violated the Administrative Procedure Act, which requires agencies to justify their rules and consider feedback, and that such rules exceeded the SEC's authority. The appeals court agreed with the industry associations’ contention that the SEC should have considered the rules’ collective impact in its economic analysis. The compliance date for Form SHO filings was originally scheduled for February 7, 2025, but at the last minute, the SEC announced a one-year extension through February 2026. This may signal that the current SEC Commission, led by Chairman Paul Atkins, is unlikely to further defend the rules.