On December 3, 2025, the SEC formally granted a temporary exemption for investment advisers subject to Form SHO filing until January 2, 2028. The SEC adopted Rule 13f-2 and Form SHO under the Securities Exchange Act of 1934 (“Exchange Act”) in October 2023 to require 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.

Form SHO was adopted together with Rule 10c-1a under the Exchange Act, which would require daily reporting by broker dealers to FINRA and subsequent public dissemination of information on covered securities loans. As previously reported, both rules were subject to a lawsuit by the National Association of Private Fund Managers, the Managed Funds Association, and the Alternative Investment Management Association filed in the U.S. Court of Appeals for the Fifth Circuit (“Court”) challenging 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. As previously reported in August 2025, the Court remanded, without vacatur, the rules to the SEC, agreeing with the petitioners’ contention that the SEC should have considered the rules’ collective impact in its economic analysis.

Accordingly, this exemption, which defers reporting on Form SHO until January 2028 and reporting under Rule 10c-1a until September 2028, allows the SEC time to consider and quantify their cumulative economic impact, respond to the Court’s opinion and take any further appropriate actions, which may include proposing amendments to the rules. We will continue to monitor the status of this rulemaking and provide additional guidance and resources to clients as needed.