Document ID: SEC-2008-1433-0001
Agency: sec
Document Type: Rule
Title: Disclosure of Short Sales and Short Positions by Institutional Investment Managers
Posted Date: 2008-10-17T04:00Z

[Federal Register: October 17, 2008 (Volume 73, Number 202)]
[Rules and Regulations]               
[Page 61678-61690]
From the Federal Register Online via GPO Access [wais.access.gpo.gov]
[DOCID:fr17oc08-6]                         

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 240 and 249

[Release No. 34-58785; File No. S7-31-08; October 15, 2008]
RIN 3235-AK23

 
Disclosure of Short Sales and Short Positions by Institutional 
Investment Managers

AGENCY: Securities and Exchange Commission.

ACTION: Interim final temporary rule; Request for comments.

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SUMMARY: The Commission is adopting an interim final temporary rule 
requiring certain institutional investment managers to file information 
on Form SH concerning their short sales and positions of section 13(f) 
securities, other than options. The new rule extends the reporting 
requirements established by our Emergency Orders dated September 18, 
2008, September 21, 2008 and October 2, 2008, with some modifications. 
The extension will be effective until August 1, 2009. Consistent with 
the Orders, the rule requires an institutional investment manager that 
exercises investment discretion with respect to accounts holding 
section 13(f) securities having an aggregate fair market value of at 
least $100 million to file Form SH with the Commission following a 
calendar week in which it effected a short sale in a section 13(f) 
security, with some exceptions.

DATES: Effective Date: Sec. Sec.  240.10a-3T, 249.326T and temporary 
Form SH are effective from October 18, 2008 until August 1, 2009.
    Compliance Dates: An institutional investment manager that is 
required to file a Form SH report on October 24, 2008 or October 31, 
2008, must comply with Rule 10a-3T, except that it:
     May exclude disclosure of short positions reflecting short 
sales before September 22, 2008 from the Form SH report filed on either 
or both of those dates. An institutional investment manager choosing to 
exclude these short sales effected before September 22 is not required 
to report short positions otherwise reportable if the short position in 
the section 13(f) security constitutes less than one-quarter of one 
percent of that class of the issuer's securities issued and outstanding 
as reported on the issuer's most recent annual or quarterly report, and 
any current report subsequent thereto, filed with the Commission 
pursuant to the Securities Exchange Act of 1934, unless the manager 
knows or has reason to believe that the information contained therein 
is inaccurate, and the fair market value of the short position in the 
section 13(f) security is less than $1,000,000; and
     Does not have to file Form SH in XML format in accordance 
with the special filing instructions posted on the Commission's Web 
site. Instead, the institutional investment manager may file Form SH on 
EDGAR in the same manner as the form was filed pursuant to the 
Emergency Orders dated September 18, 2008, September 21, 2008 and 
October 2, 2008.
    Comment Date: Comments on the interim final temporary rule should 
be received on or before December 16, 2008.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's Internet comment form (http://
www.sec.gov/rules/final.shtml); or
     Send an e-mail to rule-comments@sec.gov. Please include 
File Number S7-31-08 on the subject line; or
     Use the Federal Rulemaking Portal (http://
www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments in triplicate to Florence E. Harmon, 
Acting Secretary, Securities and Exchange Commission, 100 F Street, 
NE., Washington, DC 20549-1090.

All submissions should refer to File Number S7-31-08. This file number 
should be included on the subject line if e-mail is used. To help us 
process and review your comments more efficiently, please use only one 
method. The Commission will post all comments on the Commission's 
Internet Web site (http://www.sec.gov/rules/final.shtml). Comments are 
also available for public inspection and copying in the Commission's 
Public Reference Room, 100 F Street, NE., Washington, DC 20549. All 
comments received will be posted without change; we do not edit 
personal identifying information from submissions. You should submit 
only information that you wish to make publicly available.

FOR FURTHER INFORMATION CONTACT: Steven Hearne, at (202) 551-3430, in 
the Division of Corporation Finance, Marlon Paz, at (202) 551-5756, in 
the Division of Trading and Markets, or Stephan N. Packs, at (202) 551-
6865, in the Division of Investment Management, U.S. Securities and 
Exchange Commission, 100 F Street, NE., Washington, DC 20549-3010.

SUPPLEMENTARY INFORMATION: The Commission is adopting temporary Rule 
10a-3T and Temporary Form SH (Form SH) under the Securities Exchange 
Act of 1934 \1\ as an interim temporary final rule. We are soliciting 
comments on all aspects of the interim temporary final rule and Form 
SH. We will carefully consider the comments that we receive and intend 
to address them in a subsequent release.
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    \1\ 15 U.S.C. 78 et seq.
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I. Background

    Recently, we have become concerned that there is a substantial 
threat of sudden and excessive fluctuations of securities prices and 
disruption in the functioning of the securities markets that could 
threaten fair and orderly markets. These concerns are evidenced by our 
recent publication of Emergency Orders under section 12(k) of the 
Exchange Act in July \2\ and September of this year.\3\ In these 
Orders, we noted our concerns about the possible unnecessary or 
artificial price movements that may be based on unfounded rumors and 
may be exacerbated by short selling.
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    \2\ Release No. 34-58166 (July 15, 2008) [73 FR 42379] (imposing 
borrowing and delivery requirements on short sales of the equity 
securities of certain financial institutions).
    \3\ Release Nos. 34-58592 (Sept. 18, 2008) [73 FR 55169] 
(temporarily prohibiting short selling in the publicly traded 
securities of certain financial institutions), 34-58591 (Sept. 18, 
2008) [73 FR 55175] (requiring institutional investment managers to 
report short sales activities) and 34-58572 (Sept. 17, 2008) [73 FR 
54875] (imposing enhanced delivery requirements on sales of all 
equity securities).
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    Short selling involves a sale of a security that the seller does 
not own or a sale which is consummated by the delivery of a security 
borrowed by, or for the account of, the seller.\4\ Short sales normally 
are settled by the

[[Page 61679]]

delivery of a security borrowed by or on behalf of the seller. 
Regulation SHO, which became fully effective on January 3, 2005, sets 
forth the regulatory framework governing short sales.\5\ Among other 
things, Regulation SHO imposes a close-out requirement to address 
failures to deliver stock on trade settlement date and to target 
potentially abusive short selling in certain equity securities.
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    \4\ 17 CFR 242.200(a).
    \5\ 17 CFR 242.200(a).
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    As adopted, Regulation SHO included two major exceptions to the 
close-out requirement: The ``grandfather'' provision and the ``options 
market maker'' exception. Due to our concerns about the potentially 
negative market impact of large and persistent fails to deliver, and 
the fact that we continued to observe threshold securities with fail to 
deliver positions that are not being closed out under existing delivery 
and settlement requirements, effective on October 15, 2007, we adopted 
an amendment to Regulation SHO that eliminated the ``grandfather'' 
exception to Regulation SHO's close-out requirement.\6\ The options 
market maker provision excepted any fail to deliver position in a 
threshold security resulting from short sales effected by a registered 
options market maker to establish or maintain a hedge on options 
positions that were created before the underlying security became a 
threshold security. On September 17, 2008, we adopted and made 
immediately effective an amendment to Rule 203(b)(3) of Regulation SHO 
to eliminate the options market maker exception to the rule's close-out 
requirement.\7\
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    \6\ See Release No. 34-56212 (Aug. 7, 2007) [72 FR 45544].
    \7\ See Release No. 34-58572 (Sept. 17, 2008).
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    On September 18, 2008, the Commission issued an Emergency Order 
pursuant to section 12(k)(2) of the Exchange Act \8\ requiring 
institutional investment managers to report information concerning 
their short sales of section 13(f) securities on a weekly basis.\9\ We 
amended the Order on September 21, 2008 to clarify certain technical 
issues and the public availability of the information provided by the 
institutional investment managers.\10\ On October 2, 2008, we extended 
the Order's effectiveness through October 17, 2008, and stated that the 
Forms SH filed under the Order would remain nonpublic to the extent 
permitted by law.\11\
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    \8\ 15 U.S.C. 78l(k)(2).
    \9\ Release No. 34-58591.
    \10\ Release No. 34-58591A (Sept. 21, 2008) [73 FR 58987].
    \11\ Release No. 34-58724 (Oct. 2, 2008) [73 FR 58987-01]. 
Release 34-58724, together with Release 34-58591 and 34-58591A are 
collectively referred to as the Emergency Orders.
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    Under the terms of the Emergency Orders, institutional investment 
managers that exercise investment discretion with respect to accounts 
holding securities described in Rule 13f-1(c) under the Exchange Act 
\12\ that have an aggregate fair market value of at least $100,000,000, 
and effect short sales of those securities generally are required to 
file Form SH with the Commission on a weekly basis. The Form SH filing 
currently must be made on the first business day of each calendar week 
following a week in which the institutional investment manager has 
effected short sales with respect to any section 13(f) security that is 
not an option.\13\ With respect to each applicable section 13(f) 
security, the Form SH filing must identify the issuer and CUSIP number 
of the relevant security and reflect the manager's start of day short 
position, the number and value of securities sold short during the day, 
the end of day short position, the largest intraday short position, and 
the time of the largest intraday short position.
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    \12\ 17 CFR 240.13f-1(c).
    \13\ Our discussion here and elsewhere in the release regarding 
the need to disclose short sales and short positions assumes that 
the reporting exception, which is described in Section II.A.3, does 
not apply.
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    To make clear that continuous reporting of open short positions 
previously reported on Form SH was not required when no new short sales 
had been effected during the calendar week covered by the next Form SH 
filing due to be filed, the Emergency Orders stated that no Form SH 
filing is required when no short sales of a section 13(f) security have 
been effected since the previous filing of a Form SH.\14\ Further, an 
institutional investment manager need not report certain information 
regarding short sales and positions that otherwise would be reportable 
on Form SH if:
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    \14\ Similarly, under the Emergency Orders no Form SH filing is 
required when all short sales of section 13(f) securities that have 
been effected since the last day of the prior reporting period for 
which a Form SH was due qualify for the reporting exception.
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     The short sale or position in the section 13(f) security 
constitutes less than one-quarter of one-percent of that class of the 
issuer's section 13(f) securities issued and outstanding, as reported 
on the issuer's most recent annual or quarterly report, and any 
subsequent current report, filed with the Commission pursuant to the 
Exchange Act, unless the manager knows or has reason to believe that 
the information contained therein is inaccurate; and
     The fair value market of the short sale or position in the 
section 13(f) security is less than $1,000,000.

II. Purposes of the Interim Final Temporary Rule

    As explained in the Emergency Orders requiring Form SH filings, and 
other emergency orders under section 12(k) of the Exchange Act,\15\ we 
are concerned by sudden and excessive fluctuation of securities prices 
and disruptions in the fair and orderly functioning of the securities 
markets. We are concerned about possible unnecessary or artificial 
price movements that may be based on unfounded rumors and may be 
exacerbated by short selling.
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    \15\ See also Release Nos. 34-58166 (July 15, 2008) [73 FR 
42837] and 34-58572 (Sept. 17, 2008) [73 FR 58698].
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    We note that regulators in several foreign jurisdictions also have 
adopted rules requiring disclosure of short sales and net short 
positions. For example, the Netherlands Authority for the Financial 
Markets (AFM) requires daily disclosure to the AFM of net short 
positions greater than 0.25% of the capital of financial institutions 
listed on the Euronext Amsterdam stock exchange. The UK Financial 
Services Authority (FSA) requires daily disclosure to UK exchanges of 
net short positions greater than 0.25% of the ordinary stock of UK 
financial institutions listed in the United Kingdom.
    The Commission believes that requiring the filing of the 
information on Form SH will provide useful information to the staff to 
analyze the effects of our rulemakings relating to short sales and in 
evaluating whether our current rules are working as intended, 
particularly in times of financial stress in our markets. The reports 
will supply the Commission with important information about the size 
and changes in short sales of particular issuers by particular 
investors. That information will be available to the Commission to 
consider when questions about the propriety of certain short selling 
occur.
    Because of these concerns, we are extending the requirements to 
file the Forms SH until August 1, 2009 with the following modifications 
to the reporting requirements:
     Beginning on October 18, 2008, the Form SH weekly filing 
deadline will be the last business day of the calendar

[[Page 61680]]

week following a calendar week in which short sales are effected 
instead of the first business day as required by the Emergency Orders. 
This change will provide filers with additional time to gather and 
verify the necessary information and file the forms.
     Form SH filers will no longer be required to disclose the 
value of the securities sold short (currently column 5 of Form SH), the 
largest intraday short position (currently column 7 of Form SH) and the 
time of day of the largest intraday short positions (currently column 8 
of Form SH). We understand that some of this information has been 
difficult for filers to obtain.
     Form SH filers will be required to report all short 
positions, including short positions effected prior to September 22, 
2008, when reporting data elements 5, 6 and 7, Short Position (Start of 
Day), Number of Securities Sold Short (Day) and Short Position (End of 
Day). We believe this additional data will assist with our goals of 
tracking short sale activity.
     The threshold for reporting short sales or positions will 
be raised from a fair market value of $1 million to a fair market value 
of $10 million. We have raised this threshold due to the new 
requirement to disclose pre-September 22, 2008 short sales and 
positions.\16\
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    \16\ Under the Emergency Orders, institutional investment 
managers did not have to disclose short sales effected, and 
positions held, prior to September 22, 2008.
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     Filers will be required to submit an XML tagged data file 
to the Commission providing the requested data. This new requirement 
will facilitate the review of the filed data by the Commission staff.

III. Interim Final Temporary Exchange Act Rule 10a-3T and Form SH

    We are adopting interim final temporary Exchange Act Rule 10a-3T 
(Rule 10a-3T) to require institutional investment managers to continue 
filing Form SH in a form that is substantially similar to that required 
by the Emergency Orders. Adoption of the interim final temporary rule, 
which will be effective immediately and will continue in effect until 
August 1, 2009, will facilitate our review of our regulation of short 
sales. We have included several requests for comment in this release. 
We will consider public comments on Rule 10a-3T and Form SH in 
determining whether we should revise the interim final temporary rule 
or Form SH in any respect, as well as whether we should promulgate a 
longer-term or permanent short sale reporting requirement upon 
expiration of Rule 10a-3T and Form SH on August 1, 2009. We intend to 
address any comments received in a subsequent release.

A. Description of Rule 10a-3T

    Exchange Act Rule 10a-3T requires certain institutional investment 
managers that exercise investment discretion \17\ with respect to 
accounts holding section 13(f) securities \18\ to file a nonpublic Form 
SH on a weekly basis if they have effected short sales with respect to 
a section 13(f) security during the reporting period preceding the due 
date of the filing.
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    \17\ For purposes of this rule, the term ``investment 
discretion'' has the same meaning as in Rule 13f-1(b) under the 
Exchange Act. [17 CFR 240.13f-1(b)].
    \18\ The term ``section 13(f) securities'' is defined in Rule 
13f-1(c) under the Exchange Act [17 CFR 240.13f-1(c)] to include 
securities of a class described in Section 13(d)(1) of the Exchange 
Act [15 U.S.C. 78m(d)(1)] that are admitted to trading on a national 
securities exchange or quoted on the automated quotation system of a 
registered securities association. In determining what classes of 
securities are section 13(f) securities, an institutional investment 
manager may rely on the Official List of Section 13(f) Securities 
published by the Commission available at http://www.sec.gov/
divisions/investment/13flists.htm.
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1. Institutional Investment Managers Required To Report Short Sales
    Rule 10a-3T requires institutional investment managers to keep 
track of certain short sale transactions and file Form SH to report 
them. The rule requires the filing of Form SH by those institutional 
investment managers that: (1) As of the end of the most recent calendar 
quarter, filed, or were required to file, a Form 13F for the calendar 
quarter; and (2) during a Sunday to Saturday calendar week effected a 
short sale in a section 13(f) security other than options.\19\ The 
manager is required to file a Form SH report with the Commission on the 
last business day of the ensuing calendar week. By limiting the Form SH 
reporting requirement to institutional investment managers that are 
required to file Form 13F, we subject only those institutional 
investment managers that exercise investment discretion with respect to 
accounts holding section 13(f) securities that have an aggregate fair 
market value on the last trading day of any month of the previous 
calendar year of at least $100 million to the Form SH reporting 
requirement.\20\
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    \19\ As adopted, the rule differs from the requirement of the 
Order which applied to institutional investment managers that were 
required to file Form 13F for the quarter ended June 30, 2008. 
Because the temporary rule will be in effect until August 1, 2009, 
the temporary rule refers instead to the previous calendar quarter.
    \20\ See 17 CFR 240.13f-1(a)(1).
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    We are applying the rule only to Form 13F filers because they 
exercise discretion over large accounts that have significant potential 
to affect the markets. In addition, these filers already are subject to 
Exchange Act reporting and in most instances, the Emergency Orders, and 
therefore are familiar with using the Commission's EDGAR system to 
submit filings. In addition, the Form SH reporting requirement applies 
only to section 13(f) securities, which include equity securities of a 
class described in section 13(d)(1) of the Exchange Act that are 
admitted to trading on a national securities exchange or quoted on the 
automated quotation system of a registered securities association, 
because this is a useful and tested term that is well-suited to capture 
the information we are seeking.
Request for Comment
     Rule 10a-3T limits reporting of short sales and short 
positions to institutional investment managers that are required to 
file Form 13F. Should we continue to require Form SH reporting by these 
institutional investment managers? Should we require only a subset of 
these institutional investment managers to file Form SH reports? If so, 
how should we limit the type of institutional investment manager that 
we require to file Form SH? Should we instead require a different set 
of persons to file Form SH? Are there categories of persons that 
conduct a significant amount of short sales but who are not required to 
submit Form SH because they are not institutional investment managers 
required to file Form 13F? If so, which categories of short sellers 
should be subject to Form SH reporting? Would it be appropriate to 
require anyone who conducts short sales or has short positions in 
excess of specified thresholds, such as those in Rule 10a-3T(b)(2)(ii), 
to report?
     Are there other, better ways to collect information about 
short sales than by requiring Form SH?
     Should we require short sellers to keep current detailed 
books and records of their short sale activities and their short 
positions, of the sort required under Rule 17a-3(a)(6) under the 
Exchange Act? \21\ If so, should we require short sellers to retain the 
name of the broker, the number of shares, the price, the issuer name, 
the time and date of entry of the order, the time and date of execution 
of the order, the type of order (limit or market), the locate source or 
exception to locate claimed, the contact at the locate, the time and 
date when the locate was received, the amount of shares located, the 
time and

[[Page 61681]]

date of the borrow, the number of shares borrowed, the source from 
which they were borrowed, and where the borrowed shares are located? 
Should we require other information be maintained?
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    \21\ 17 CFR 240.17a-3(a)(6).
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     In the alternative, or in addition, should we require all 
short sellers to publicly provide a notice filing when their short sale 
activity or positions cross a specific threshold that would be deemed 
significant? If so, what information should the notice filing contain? 
If a notice filing is required, should it be filed with us on a 
nonpublic basis? Would there be any concerns about publicly filing such 
a notice? Would such a notice filing provide useful information to 
investors? Would requiring all short sellers to keep detailed records 
of their short sale activities and filing when necessary a notice 
filing relating to those activities raise any other concerns, such as 
concerns about the potential costs? In the alternative, should we 
instead require short sellers to produce books and records upon request 
from the Commission?
2. Short Sales and Short Positions Required To Be Reported
    Rule 10a-3T requires an institutional investment manager to report 
short sales and short positions, as defined in Rule 200 of Regulation 
SHO. Rule 200 defines a short sale to mean any sale of a security which 
the seller does not own or any sale which is consummated by the 
delivery of a security borrowed by, or for the account of, the 
seller.\22\ For purposes of Rule 10a-3T, a short position is the 
aggregate gross short sales of an issuer's section 13(f) securities 
(excluding options), less purchases to close out a short sale in the 
same issuer. The Form SH short position is not net of long position in 
the issuer. If a person that has loaned a security to another person 
sells the security and a bona fide recall is initiated within two 
business days after trade date, the person that has loaned the security 
is deemed to own the security for purposes of Rule 200(g)(1) and Rule 
200(b) of Regulation SHO, and such sale will not be treated as a short 
sale.\23\ Rule 10a-3T is intended to broadly require institutional 
investment managers to account for their short sales.
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    \22\ 17 CFR 242.200.
    \23\ For staff guidance regarding how sales of loaned but 
recalled securities should be treated for purposes of the Emergency 
Orders, see the Division of Trading and Market Guidance Regarding 
Sale of Loaned but Recalled Securities available at http://
www.sec.gov/divisions/marketreg/loanedsecuritiesfaq.htm.
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    Options and short sales of options on section 13(f) securities are 
not required to be reported on Form SH. However, certain transactions 
that involve options are required to be reported.\24\ For example, if 
an institutional investment manager exercises a put and is net short 
pursuant to Rule 200(c) of Regulation SHO, the resulting transaction is 
a short sale and must be reflected on Form SH. Similarly, if the 
institutional investment manager effects a short sale as a result of 
assignment to it as a call writer, upon exercise, the resulting 
transaction is a short sale and must be reflected on Form SH.
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    \24\ Short sales resulting from the exercise of option contracts 
are reportable as of the date of the exercise.
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Request for Comment
     Rule 10a-3T is limited to reporting on short sales and 
short positions of section 13(f) securities, other than options. Should 
we continue to require disclosure about short sales of these section 
13(f) securities? Should we limit the securities that institutional 
investment managers are required to report on to a subset of these 
securities, such as equity securities of financial institutions? Would 
it be more appropriate for the Form SH reporting requirement to cover 
all publicly traded equity securities regardless of whether they are 
listed on a national securities exchange or quoted on the automated 
quotation system of a registered securities association? Should we 
require reporting on Form SH for transactions relating to any equity 
security of a company reporting under the Exchange Act?
     Rule 10a-3T requires reporting of the start of day short 
position, the gross number of securities sold short during the day and 
the end of day short position. Does requiring reporting of this 
information have the effect of reducing manipulative behavior and other 
improper conduct by short sellers? Do these categories of information 
provide the most useful data for analyzing short selling activities and 
combating market manipulation? If not, are there other benefits that 
Form SH information will provide? Are there other categories of 
information that we should require that would be useful to our 
objectives, such as transaction audit trails or the portion of the 
number of securities sold short in foreign markets?
     Do the definitions of the terms short sale and short 
position that we use in Rule 10a-3T adequately capture the types of 
transactions on which the Commission should focus? Should we use 
definitions for the terms short sale or short position in Rule 10a-3T 
that are different from the Regulation SHO definitions? If so, how 
should we define these terms?
     How can we best address the risk that managers may try to 
evade reporting by conducting short sales through synthetic instruments 
or through third parties that are not required to report on Form SH? 
Should we require disclosure of these transactions as well? Should we 
amend the rule to require filers to report any synthetic arrangements 
that function as short sales and provide Form SH information for those 
positions and identify the parties to those transactions? How would we 
define or describe these transactions? Should we require any short 
seller that is entering the short to hedge a synthetic position entered 
into with another party to identify the other party in Form SH?
     Should we revise Rule 10a-3T to require disclosure of 
options and short sales of options? Should Rule 10a-3T require 
disclosure of other financial instruments such as single stock futures?
     Rule 10a-3T requires information to be reported to the 
Commission. Should the rule require this information to be provided to 
the self-regulatory organizations? If so, which self-regulatory 
organizations should receive this information? Should we work with the 
exchanges and self-regulatory organizations to capture this 
information? Would these organizations be well equipped to monitor the 
data that we are requesting?
     Should we consider harmonizing our short sale reporting 
and regulation with foreign regulators? Would it be appropriate to 
require similar short sale reporting to that implemented by the FSA in 
the United Kingdom? \25\ What aspects would be more or less 
appropriate?
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    \25\ See information on the short selling instruments issued in 
September 2008 at the Financial Services Authority Web site at 
http://www.fsa.gov.uk/pages/Library/Policy/Handbook/short-
selling.shtml.
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3. Exceptions to the Filing and Reporting Requirements
    Rule 10a-3T does not require an institutional investment manager to 
file a Form SH to report short sales and positions if: \26\
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    \26\ Unlike the requirements under the Emergency Orders, the 
rules we adopt today require short sales or positions effected prior 
to September 22, 2008, to be reported.
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     The institutional investment manager has not effected any 
short sales of section 13(f) securities during the reporting period 
covered by the Form SH due to be filed; or

[[Page 61682]]

     On each calendar day during the calendar week, the start 
of day short position, the gross number of securities sold short during 
the day and the end of day short position constitute less than one-
quarter of one percent of that class of the issuer's section 13(f) 
securities issued and outstanding as reported on the issuer's most 
recent annual, quarterly or current report filed with the Commission 
pursuant to section 13 of the Exchange Act, unless the manager knows or 
has reason to believe the information contained therein is inaccurate 
and the fair market value of the start of day short position, the gross 
number of securities sold short during the day and the end of day short 
position is less than $10,000,000.\27\
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    \27\ For purposes of determining whether the $10,000,000 
threshold is met, the manager should multiply the number of shares 
the manager sold short that day by the market price as of the time 
of the close of trading at the NYSE on that day.
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    Once a determination is made that a Form SH filing is required, 
Rule 10a-3T permits an institutional investment manager to disclose in 
the appropriate data element its reliance on this exception with 
respect to information otherwise required to be reported. The 
institutional investment manager may disclose ``N/A'' in the 
appropriate data element to report the number of securities sold short 
or corresponding information regarding the short position in that class 
where the data element falls below the reporting threshold. The 
exception limits the substantive disclosure required on Form SH to 
significant short sales and positions that have the potential to 
materially affect the price of the underlying securities. This 
limitation is designed to strike a balance between the burden of 
compiling and providing the information to the Commission and the need 
for information about short sales to be available to the Commission.
    We are clarifying in accordance with staff guidance provided in 
conjunction with the Emergency Orders that institutional investment 
managers may act as conduits for customer orders by handling such 
orders on a ``riskless principal'' \28\ basis in the following 
scenarios, which may result in the broker-dealer effecting a short 
sale: (i) A broker-dealer receives an order to sell a section 13(f) 
security from a customer who is net long on the securities being sold, 
and the broker-dealer then seeks to execute that order, either in whole 
or in part, by selling the section 13(f) security as riskless 
principal, and the broker-dealer has an overall net short position in 
such section 13(f) security; or (ii) a broker-dealer receives an order 
to buy a section 13(f) security from a customer, and the broker-dealer 
then seeks to execute that order, either in whole or in part, by 
purchasing the section 13(f) security as riskless principal, and then 
selling the section 13(f) security to the customer, and the broker-
dealer has an overall net ``short'' position in such section 13(f) 
security. In both scenarios, the short sales need not be reported by 
the broker-dealer on Form SH.
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    \28\ A ``riskless principal'' transaction is generally described 
as trades in which, after receiving an order to buy (or sell) from a 
customer, the broker-dealer purchases (or sells) the security from 
(or to) another person in a contemporaneous offsetting transaction. 
See Exchange Act Rule 10b-10(a)(2)(ii)(A) [17 CFR 240.10b-
10(a)(2)(ii)(A)]; Release No. 34-33743 (Mar. 9, 1994) at n.11.
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    We are eliminating the ``grandfather'' provision that was included 
in the Form SH filing conditions set forth in the Emergency Orders. The 
Emergency Orders did not require disclosure of existing or outstanding 
short positions in section 13(f) securities held before the September 
22, 2008 effective date of the initial order. This grandfather 
provision was established primarily to address concerns about the 
public disclosure of institutional investment managers' pre-existing 
short positions before we indicated that Form SH filings would be made 
on a nonpublic basis. One of the commenters on the Emergency Orders 
noted that a consequence of the grandfather provision is that some Form 
SH filers will have to keep two sets of books until all of the pre-
September 22 positions are cleared out.\29\
---------------------------------------------------------------------------

    \29\ See letter from the Securities Industry and Financial 
Markets Association dated October 9, 2008 available in file No. S7-
24-08.
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    Under Rule 10a-3T, Form SH filers will be required to report all 
short positions, including short positions effected prior to September 
22, 2008, when reporting data elements 5, 6 and 7, Short Position 
(Start of Day), Number of Securities Sold Short (Day) and Short 
Position (End of Day) on Form SH. We believe that the additional data 
about the pre-September 22 positions will improve our efforts to 
analyze short sale activity.
    In connection with elimination of the grandfather provision, we are 
revising the exception to the Form SH filing requirements. Under the 
Emergency Orders, Form SH filers are not required to report short sales 
or short positions otherwise reportable if: The short sale or short 
position in the section 13(f) security constitutes less than one-
quarter of one per cent of that class of the issuer's section 13(f) 
securities issued and outstanding, as reported on the issuer's most 
recent Exchange Act report; and the fair market value of the short sale 
or short position in the section 13(f) security is less than $1 
million. We are raising the threshold for filing and reporting short 
sales or short positions in a class of section13(f) securities other 
than options from a fair market value of $1 million to a fair market 
value of $10 million primarily due to the new requirement for 
institutional investment managers to report information about their 
pre-September 22 short positions. In addition, we note that the 
threshold is intended to ensure that small percentage positions that 
comprise large monetary positions are reported, and we believe that $10 
million more suitably addresses this concern.
    An institutional investment manager that is required to file a Form 
SH report on October 24, 2008 or October 31, 2008 may exclude 
disclosure of short positions reflecting short sales effected before 
September 22, 2008 from the Form SH report filed on either or both of 
those dates. However, if the manager excludes such disclosure, the 
relevant fair market threshold for reporting short sales or positions 
is the $1 million threshold.
Request for Comment
     Is the exception in Rule 10a-3T to Form SH reporting of 
short sales that fall below the specified thresholds appropriate? If 
so, are the thresholds set at appropriate levels, or should they be 
higher or lower? What threshold would be appropriate? Should we use 5% 
as in Regulation 13D \30\ or is a smaller threshold, such as 2.5%, more 
appropriate? If you suggest a different type of exception to Form SH 
reporting, please describe the exception that you think is appropriate.
---------------------------------------------------------------------------

    \30\ 17 CFR 240.13d-1 et seq.
---------------------------------------------------------------------------

     Is the reporting exception in Rule 10a-3T for ``riskless 
principal'' transaction appropriate? If not, why not and what would be 
the best way to address ``riskless principal'' transactions in the 
rule?
     Should we continue to use a significance test that couples 
a percentage of shares outstanding threshold with a fair market value 
threshold? Should the percentage and market value thresholds be 
combined or should they be separate standards? If separate, what level 
should each be set at? Would $1 million or $10 million be appropriate? 
Would 1%, 2.5% or 5% be appropriate? Should we instead adopt a 
threshold that is tied to the number of shares sold short or some other 
standard?
     As adopted, a manager is required to report its short 
sales and short

[[Page 61683]]

positions. However, managers often take short positions in order to 
hedge the risk on long positions in which they invest and not for 
speculative purposes. Should we develop an exemption that would permit 
managers to avoid reporting of hedging short positions or in the 
alternative require additional information that explains the purposes 
of various short positions? If so, how would we best develop the 
exemption or the request for additional information and how would we 
define hedging transactions? Would such an exemption be useful? Would 
it subsume the purpose of the rule?
4. Transition and Expiration Dates of Rule 10a-3T
    As noted above, the Commission remains concerned by sudden and 
excessive fluctuation of securities prices and disruptions in the fair 
and orderly functioning of the securities markets. We are adopting this 
temporary rule to continue the reporting obligations established in our 
Emergency Orders as modified. For the reasons those Orders were adopted 
and for the reasons explained in this release, no gap between the 
reporting obligations of the Emergency Orders and the obligations 
established by this rule should exist. In addition, we received a 
variety of comments from the public about the Emergency Orders, which 
were valuable in developing this interim temporary final rule. As a 
result, this rule is immediately effective.
    In order to assist with the transition, institutional investment 
managers that are required to file a Form SH report on October 24, 2008 
or October 31, 2008, must comply with Rule 10a-3T, except that they may 
exclude disclosure of short positions reflecting short sales before 
September 22, 2008 from the Form SH report filed on either or both of 
those dates. An institutional investment manager may choose to exclude 
these short sales effected before September 22 if the short position in 
the section 13(f) security constitutes less than one-quarter of one 
percent of that class of the issuer's securities issued and outstanding 
as reported on the issuer's most recent annual or quarterly report, and 
any current report subsequent thereto, filed with the Commission 
pursuant to the Exchange Act, unless the manager knows or has reason to 
believe that the information contained therein is inaccurate, and the 
fair market value of the short position in the section 13(f) security, 
as of September 22, 2008, was less than $1,000,000. In addition, 
institutional investment managers do not have to file Form SH in XML 
format in accordance with the special filing instructions posted on the 
Commission's Web site for their Form SH reports on October 24, 2008 or 
October 31, 2008. Instead, the institutional investment manager may 
file Form SH on EDGAR in the same manner as the form was filed pursuant 
to the Emergency Orders dated September 18, 2008, September 21, 2008 
and October 2, 2008.
    Subsequently, beginning with the calendar week ending November 1, 
2008, institutional investment managers are required to report as 
specified in Rule 10a-3T and the filer instructions as to the assembly 
of the EDGAR submission provided on the Commission's Web site at http:/
/www.sec.gov/info/edgar/ednews/formshsubmission.htm or in a future 
update of the EDGAR Filer Manual. Rule 10a-3T will expire and cease to 
be effective on August 1, 2009 unless we act to continue or revise the 
rule and extend the effective date.
Request for Comment
     How long should institutional investment managers be 
required to file Form SH reports with the Commission? Is the period 
extending until August 1, 2009 that we are adopting appropriate? Should 
we require Form SH reporting beyond August 1, 2009?

B. Form SH

1. Timing and Nonpublic Nature of Form SH
    Rule 10a-3T requires institutional investment managers to report 
certain short sales to the Commission on Form SH. Under Rule 10a-3T, 
institutional investment managers must file Form SH on the last 
business day of each calendar week following a week in which the 
institutional investment manager has effected certain short sales with 
respect to any section 13(f) security that is not an option.\31\
---------------------------------------------------------------------------

    \31\ The Form SH is required to be filed electronically on the 
Commission's EDGAR system on or before 5:30 p.m. Eastern Time on the 
last business day of the calendar week.
---------------------------------------------------------------------------

    This is a change from the Form SH filing deadline set forth in the 
Emergency Orders which required Form SH to be filed on the first 
business day of each calendar week immediately following a week in 
which the institutional investment manager effected certain short 
sales. This change will provide filers with additional time to gather, 
verify and file the data, decreasing the burden on the filers without 
affecting the efficacy of the information to the staff.
    As we explained in our October 2008 Order, we are concerned that 
publicly available Form SH data could give rise to additional, 
imitative short selling. Accordingly Rule 10a-3T states that all Forms 
SH filed with the Commission will be nonpublic to the extent permitted 
by law. The Freedom of Information Act provides at least two exemptions 
under which the Commission has authority to withhold the 
information.\32\ A Form SH filer should not submit a confidential 
treatment request to the Commission. A Form SH filer must label its 
Form SH as non-public, as required by the instructions to the form.
---------------------------------------------------------------------------

    \32\ The Freedom of Information Act (``FOIA'') Exemption 4 
provides an exemption for ``trade secrets and commercial or 
financial information obtained from a person and privileged or 
confidential.'' FOIA Exemption 8 provides an exemption for matters 
that are ``contained in or related to examination, operating, or 
condition reports prepared by, on behalf of, or for the use of an 
agency responsible for the regulation or supervision of financial 
institutions.''
---------------------------------------------------------------------------

Request for Comment
     Form SH requires detailed reports regarding institutional 
investment managers' significant short positions in section 13(f) 
securities. Are there better ways for the Commission to gather short 
selling information and address our concerns than by using Form SH? Are 
the detailed reports required on Form SH appropriate? Is there any 
information that should be required in, or deleted from, the 
requirements of the Form?
     When requiring reporting of short positions, should we 
generally only require reporting of new positions, or should we require 
reporting of all short positions? Does requiring reporting of all short 
positions create significant additional burdens on filers? If so, what 
burdens and how can they best be addressed?
     Form SH requires filers to report the short position at 
the start of the day, the aggregate number of securities sold short on 
that day, and the short position at the end of the day. Is this 
information sufficient to provide an adequate understanding of the 
filer's short sale activity during the day? Should we require filers to 
report their net long and short positions in addition to the 
information already required? Is it sufficient to simply track the net 
short positions and not to report the start and end of day positions 
and the aggregate activity?
     As adopted, Form SH no longer requires reporting of the 
daily value of securities sold short, the largest intraday short 
position and the time of day of that short position. We understand that 
some institutional investment managers have had significant difficulty

[[Page 61684]]

identifying the largest intraday short position and the time of day of 
that short position. This information may be helpful in identifying 
manipulative short selling. How difficult is it for filers to track and 
report this information? Should we require filers to report this 
information? Is there an alternative way to track this kind of 
information and better identify when manipulative short selling may be 
taking place?
     Rule 10a-3T provides that the information required by Form 
SH shall remain nonpublic to the extent permitted by law. Institutional 
investment managers have expressed concern about making this 
information public. Should the information required by Form SH be 
publicly reported? Would concerns about public reporting be alleviated 
if there was a delay in filing the information, such as a delay of 10 
days, or 45 days after the end of a quarter in which the transaction 
occurred, similar to the 45-day deadline for Form 13F filings? Would 
concerns be alleviated if the information was reported by the 
institutional investment manager on a nonpublic basis, but made public 
after a delay on an issuer basis?
     If the Form SH remains nonpublic, what is the best way to 
require filers to report the Form SH information to the Commission? Is 
EDGAR the best vehicle for reporting Form SH information to the 
Commission? If not, what vehicle would be superior and why?
     We are permitting institutional investment managers to 
provide the information required by Form SH on the last business day 
following a calendar week in which the institutional investment manager 
effected a short sale. Are there concerns with permitting institutional 
investment managers with extra time to provide the information to the 
Commission? Is the extra time sufficient time to address concerns about 
the need for more time to be able to provide the information in a 
timely fashion? Should we change the weekly reporting period so it is 
not based on a calendar week?
     Institutional investment managers are required to file 
Form SH for any week during which they make a reportable short sale. Is 
it appropriate to require the filing of Form SH on a weekly basis? 
Should we require the filing to be made more frequently, such as daily? 
Should we require the filing less frequently, such as bi-weekly, 
monthly or quarterly, to reduce the filing burden? Would we be able to 
capture short selling information as effectively if Form SH reports 
were required to be filed less frequently?
2. Form SH
    Under the Emergency Orders, Form SH may be filed in ASCII or HTML. 
We are adopting rules that require that short sale and position 
information to be filed in XML tagged data format and additional 
identification within the data file. By requiring reporting in XML, the 
Commission staff will be able to more easily analyze the data that we 
receive. Based on our experience with reporting under the Emergency 
Orders, we are reducing the data that institutional investment managers 
are required to report to the Commission by removing the requirement 
that managers report the value of securities sold short during the day, 
the largest intraday short position and the time of day of the largest 
intraday short position.
    We understand that some filers have found it difficult to obtain 
and burdensome to track and report the largest intraday short position 
disclosure, and the time thereof. We are no longer requiring disclosure 
of the value of securities sold short during the day as our staff has 
the ability to perform this calculation without the disclosure from the 
institutional investment manager.
    There are three Form SH report types: Form SH Entries Report, Form 
SH Notice and Form SH Combination Report. An Entries Report is filed if 
all of the information that an institutional investment manager is 
required to report is included in the Form SH filing; a Notice is filed 
if all of the information that a manager is required to include in the 
XML tagged data file is reported by another Manager; a Combination 
Report is filed if a portion of the manager's entries are filed in the 
manager's report and a portion are reported by another manager. When 
filing a Form SH Notice or Combination Report, the manager is required 
to disclose the other managers that are reporting for the manager.
    Rule 10a-3T requires filers to format the Form SH data differently 
than under the Emergency Orders, but will similarly include:
     Disclosure of the time period of the report;
     An indication of whether the report is an amendment;
     The name and address of the institutional investment 
manager;
     A representation by the signer;
     A signature block for the person signing the form;
     An indication of the report type;
     A list of any other managers reporting for the manager 
filing the report;
     The total number of transactions reported;
     A list of other managers for whom the Form SH is filed; 
and
     The number of other included managers.\33\
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    \33\ Additional information the manager wishes to report may be 
included on the Form SH provided that the information does not, 
either by its nature, quantity, or manner of presentation, impede 
the understanding or presentation of the required information. Only 
information requested by the Form SH and its instructions is 
permitted in the XML tagged data file.
---------------------------------------------------------------------------

    In addition, the Form SH will include, where applicable, an XML 
tagged data file that provides much of the information that was 
previously required by the Emergency Orders to be included in the 
Information Table. The XML tagged data file will provide the 
information regarding short sales, including:
     The date;
     The Central Index Key (CIK) of the filer;
     The name of the issuer;
     The CUSIP of the issuer;
     The short position at the start of the day;
     The number of securities sold short on that day; and
     The short position at the end of the day.
    The XML data elements provide the bulk of the required disclosure 
in Form SH and are limited to the information requested in the 
instructions to the form. Data elements 1 through 4 provide the date, 
identify the manager by CIK, and the name and CUSIP of the issuer. Data 
Elements 5 and 7 require the manager to report the number of securities 
that represent the manager's short position in the issuer as of the 
start and end of each calendar day during the reporting period. Data 
element 6 requires the manager to report the gross, not net, number of 
securities in the issuer that the manager sold short for each calendar 
day during the reporting period.
    When determining the disclosure required in the XML tagged data 
file, an institutional investment manager may apply the exclusion in 
Rule 10a-3T(b)(2)(ii) on a day-by-day and data element-by-data element 
basis. For example, if a filer has triggered a filing obligation for a 
given calendar week, has start and end of day short positions on a 
particular day that do not qualify for the reporting exception, but 
does not effect any short sales on that day, the filer would disclose 
the appropriate numbers under elements 5 and 7 and enter zero under 
element 6. Using the same facts, if the filer did engage in short sales 
during that particular day but those sales in the aggregate met the 
reporting exception, the filer may enter

[[Page 61685]]

``N/A'' under element six. ``N/A'' can to be used any time a filer has 
a filing obligation and is omitting information under the reporting 
exception.
    To the extent still relevant, institutional investment managers may 
look to the staff guidance provided pursuant to the Emergency Orders 
regarding reporting short sales and positions on Form SH such as the 
Guidance Regarding the Commission's Emergency Order Concerning 
Disclosure of Short Selling provided by the staff of the Divisions of 
Corporation Finance, Investment Management, and Trading and Markets 
available at http://www.sec.gov/divisions/marketreg/
shortsaledisclosurefaq.htm.
Request for Comment
     Is the XML tagged data file format more easily generated 
than an ASCII document in columned or delimited format? Would XBRL 
tagged data be a preferred solution? Are there any other technology 
issues resulting from the use of XML tagged data format? Do filers have 
the ability to submit the XML tagged data by November 7, 2008?
     Should delimited ASCII text data be considered for 
transaction data? If the data is to be provided to the public, which 
data file format would be preferred? If the data is to be provided to 
the public, is there an advantage to using XML because a style sheet 
can be used to present XML data elements in a readable format?

IV. Other Matters

    The Administrative Procedure Act generally requires an agency to 
publish notice of a proposed rulemaking in the Federal Register.\34\ 
This requirement does not apply, however, if the agency ``for good 
cause finds * * * that notice and public procedure are impracticable, 
unnecessary, or contrary to the public interest.'' \35\ Further, the 
Administrative Procedure Act also generally requires that an agency 
publish an adopted rule in the Federal Register 30 days before it 
becomes effective.\36\ This requirement, however, does not apply if the 
agency finds good cause for making the rule effective sooner.\37\ The 
Commission, for good cause, finds that notice and solicitation of 
comment before Rule 10a-3T and Form SH is impracticable, unnecessary, 
or contrary to the public interest.
---------------------------------------------------------------------------

    \34\ See 5 U.S.C. 553(b).
    \35\ Id.
    \36\ See 5 U.S.C. 553(d).
    \37\ Id.
---------------------------------------------------------------------------

    For the reasons we discussed throughout this release, we believe 
that we have good cause to act immediately to adopt this rule and form 
on a temporary interim final basis. As discussed throughout this 
release, we are concerned by recent sudden and excessive fluctuation of 
securities prices and disruptions in the fair and orderly functioning 
of the securities markets and believe that the nonpublic submission of 
Form SH may provide the Commission with useful information to combat 
market manipulation that threatens investors and our capital markets. 
Adopting the rules as interim temporary rules also will minimize any 
disruption in reporting by institutional investment managers of their 
short sale activities. Avoiding such disruption should obviate the need 
for those managers to stop and restart their reporting apparatus and 
should allow us uninterrupted access to the information in the reports 
during a time of significant market upheaval.
    Rule 10a-3T takes effect on October 18, 2008. For the reasons 
discussed above, we have acted on a temporary interim final basis. We 
emphasize that we are requesting comments on the temporary rule and 
will carefully consider any comments that we receive. We intend to 
respond to the comments in a subsequent release. Moreover, this is a 
temporary rule that will expire on August 1, 2009. Setting a 
termination date for the rule will necessitate further Commission 
action no later than the end of that period if the Commission 
determines to continue the same, or similar, requirements contained in 
the temporary rule. The Commission finds that there is good cause to 
have Rule 10a-3T and Form SH effective as temporary interim rules on 
October 18, 2008 and that notice and public procedure in advance of 
effectiveness of the rules are impracticable, unnecessary and contrary 
to the public interest.\38\
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    \38\ This finding also satisfies the requirements of 5 U.S.C. 
808(2), allowing the rules to become effective notwithstanding the 
requirement of 5 U.S.C. 801 (if a federal agency finds that notice 
and public comment are ``impractical, unnecessary or contrary to the 
public interest,'' a rule ``shall take effect at such time as the 
federal agency promulgating the rule determines.'').
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V. Paperwork Reduction Act

A. Background

    Temporary Exchange Act Rule 10a-3 relates to a ``collection of 
information'' requirement within the meaning of the Paperwork Reduction 
Act of 1995 (PRA).\39\ The title for the information collection is 
``Form SH'' (OMB Control No. 3235-0646). An agency may not conduct or 
sponsor, and a person is not required to respond to, a collection of 
information unless it displays a current valid control number.
---------------------------------------------------------------------------

    \39\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

    The Office of Management and Budget (``OMB'') approved Form SH on 
September 19, 2008 in connection with the Commission's issuance of the 
Emergency Order to require institutional investment managers to file 
Form SH with the Commission.\40\ We submitted revised burden estimates 
to OMB for review and approval in accordance with 44 U.S.C. 3507(j) and 
5 CFR 1320.13. Separately, we submitted the revised burden estimates to 
OMB for review and approval in accordance with 44 U.S.C. 3507(d) and 5 
CFR 1320.11. OMB has approved the revised Form SH burden estimates 
related to our adoption of Rule 10a-3T on an emergency basis.
---------------------------------------------------------------------------

    \40\ Release No. 34-58591.
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B. Summary of Rule 10a-3T and Form SH Burden Estimates

    Rule 10a-3T will require certain institutional investment managers 
that exercise investment discretion with respect to accounts holding 
section 13(f) securities that have an aggregate fair market value of at 
least $100,000,000 to file Form SH on a weekly basis during the period 
covered by this interim rule. The Form SH filing must be made on the 
last business day of each calendar week following a week in which the 
institutional investment manager has effected any short sale with 
respect to any section 13(f) security that is not an option. Form SH is 
filed on a nonpublic basis and compliance is mandatory.
    With respect to each applicable section 13(f) security, the Form SH 
filing must reflect the number of securities sold short during the day, 
as well as the start of day short position and end of day short 
position, for that security on each calendar day of the prior week in 
which the institutional investment manager engaged in trading activity 
with respect to short sales. No Form SH filing is required when no 
short sales of a section 13(f) security have been effected during the 
reporting period to be covered by the Form SH filing or where all short 
sales and short positions are below the following thresholds on each 
day of the calendar week to be covered by the report:
     The short sales and short positions in the section 13(f) 
security constitute less than one-quarter of one-percent of that class 
of the issuer's section 13(f) securities issued and outstanding as 
reported on the issuer's most recent annual or quarterly report, and 
any current report subsequent thereto, filed with the Commission 
pursuant to the Exchange Act, unless the manager knows or has reason to 
believe that the

[[Page 61686]]

information contained therein is inaccurate; and
     The fair value market of the short sale and short position 
in the section 13(f) security is less than $10,000,000.
    When we originally requested approval of Form SH in connection with 
the Emergency Orders, we estimated that the same number of respondents 
that file Form 13F also would file Form SH, and that each Form SH 
filing would impose an estimated five burden hours on each respondent. 
Some Form SH filers indicated that the five hour burden estimate is too 
low, so we are increasing it to 20 hours as explained below. We also 
now have actual data from the Form SH filings that we received on 
September 29, 2008, October 6, 2008 and October 14, 2008 upon which to 
base our revised burden estimates. We estimate that we will receive 
approximately 1,000 Form SH filings from institutional investment 
managers each week during the nine-month period during which Rule 10a-
3T will be in effect.
    Pursuant to Rule 10-3T, Form SH contains three fewer data elements 
than did the version of Form SH required by the Emergency Orders. 
Therefore, we estimate that 1,000 institutional investment managers 
will file 36 Form SH reports annually at an estimated 20 hours per 
filing for a total annual reporting burden of 720,000 hours.\41\ The 20 
hour per filing estimate is based on data received from a small sample 
of actual filers and a random sample of filings conducted by our Office 
of Economic Analysis. Staff in the Office of Economic Analysis sampled 
100 of the Form SH filings that we received on October 6, 2008. The 
average number of pages filed was 8.2 and the median number of pages 
filed was 6, while the maximum number of pages included in a sample 
filing was 228 and the minimum was 1 page.
---------------------------------------------------------------------------

    \41\ This estimate conservatively assumes that each Form SH 
filer will make a Form SH filing each week during the period covered 
by Rule 10a-3T.
---------------------------------------------------------------------------

    Based on limited data from a small sample of actual filers, we 
estimate that the legal costs of filing Form SH for investment managers 
that retain an outside law firm to be approximately $1,000 per filing 
for 36 filings for a total of $36,000.\42\ We further estimate the 
filing agent costs to be $1,500 per week for managers that retain an 
outside agent to assist them in filing Form SH on EDGAR for a total of 
$54,000 ($1,500 x 36), and a combined cost total of $90,000,000 
($90,000 per filer x 1000 filers).
---------------------------------------------------------------------------

    \42\ The $1,000 per filing estimate is based on two-and-a-half 
hours of outside law firm time at a rate of $400 per hour.
---------------------------------------------------------------------------

    We understand that many institutional investment managers incurred 
a much higher reporting burden than five hours per filing in connection 
with the Form SH reports that they filed to comply with the Emergency 
Orders. A substantial portion of the initial reporting burden, as 
discussed in more detail in the Cost-Benefit Analysis, was attributable 
to the compressed timeframe in which the managers had to comply with 
the newly created form and the need for new programs to combine data 
from two different types of automated information systems to satisfy 
the Form SH disclosure requirements. The revised 20 hour estimate and 
cost estimate reflects an estimated average reporting burden associated 
with Form SH for each of the 36 filings that some institutional 
investment managers must make during the nine month period covered by 
Rule 10a-3T.

C. Solicitation of Comments

    Pursuant to 44 U.S.C. 3506(c)(2)(B), we request comments to: (1) 
Evaluate whether Form SH is necessary for the proper performance of the 
functions of the agency, including whether it will have practical 
utility; (2) evaluate the accuracy of our estimate of the burden 
imposed by Form SH; (3) determine whether there are ways to enhance the 
quality, utility and clarity of the information to be collected; and 
(4) evaluate whether there are ways to minimize the burden of the 
collection of information on those who are to respond, including 
through the use of automated collection techniques or other forms of 
information technology.
    Persons submitting comments on the collection of information 
requirements should direct the comments to the Office of Management and 
Budget, Attention: Desk Officer for the Securities and Exchange 
Commission, Office of Information and Regulatory Affairs, Washington, 
DC 20503, and should send a copy to Florence E. Harmon, Acting 
Secretary, Securities and Exchange Commission, 100 F Street, NE., 
Washington, DC 20549-1090, with reference to File No. S7-31-08. 
Requests for materials submitted to OMB by the Commission with regard 
to these collections of information should be in writing, refer to File 
No. S7-31 -08, and be submitted to the Securities and Exchange 
Commission, Records Management, Office of Filings and Information 
Services, 100 F Street, NE., Washington, DC 20549.

VI. Cost-Benefit Analysis

A. Background

    As stated in the Emergency Orders, we are concerned about the 
potential for sudden and excessive fluctuations of securities prices 
and disruption in the functioning of the securities markets that could 
threaten fair and orderly markets. In particular, we are concerned that 
some persons may manipulate the stock of issuers that have become 
temporarily weakened by current market conditions. Possible unnecessary 
or artificial downward price movements may be based on unfounded rumors 
and may be exacerbated by short selling. Such price declines can give 
rise to questions about the underlying financial condition of an 
issuer, which in turn can create a crisis of confidence that is not 
warranted by the issuer's true financial condition. This undue crisis 
of confidence can threaten an issuer's viability as a going concern, 
even when the underlying fundamentals of the firm do not suggest cause.
    For example, financial institutions with demand deposit liabilities 
might experience unwarranted depositor withdrawals that, without 
replacement, could lead to a funding shortfall for the financial 
institution's long term assets, such as residential mortgages and 
commercial loans. Liquidation of these assets to meet depositor 
redemption could force sales at unfavorable prices that erode capital 
and increase the risk of insolvency and institutional failure.
    Non-financial institutions can face similar risks from an undue 
crisis in confidence. Manufacturers that rely on credit with suppliers 
or financial institutions for production inputs might see this credit 
offered at less favorable terms, or even worse, become unavailable, 
placing undue burden on their working capital and cash reserves. An 
undue crisis in confidence also could lead customers to choose 
alternative products or producers if customers fear that future 
commitments, such as warrantees or service agreements, might not be 
honored.
    We therefore believe that it is necessary to continue requiring 
institutional investment managers subject to the Form 13F filing 
requirements to report information concerning their short sales of Rule 
13(f) securities on Form SH after the expiration of the Emergency Order 
dated October 2, 2008 on October 17, 2008. New Exchange Act Rule 10a-3T 
requires an institutional investment manager that exercises investment 
discretion with respect to accounts holding section 13(f) securities 
having an aggregate fair market value of at least

[[Page 61687]]

$100 million to file Form SH with the Commission each calendar week 
immediately following a calendar week in which the manager effects a 
short sale of section 13(f) securities, other than options, exceeding 
stated thresholds. Rule 10a-3T and Form SH are temporary requirements 
that will expire on August 1, 2009.

B. Benefits

    The securities markets have undergone significant stress in recent 
months. An expected benefit of Rule 10a-3T and Form SH is to help 
restore investor confidence in the markets. The disclosure may help to 
combat manipulative behavior by making it easier for us to analyze 
short selling activity. To the extent that the rule does reduce 
manipulative behavior while still permitting legitimate trading 
activity should help to alleviate any undue crisis of investor 
confidence and may strengthen the market's ability to correctly 
incorporate accurate information into securities prices.
    Among other things, the Form SH disclosure will enable staff in our 
Office of Economic Analysis and Office of Compliance, Inspections and 
Examinations to analyze short selling patterns and use the data along 
with other information to study the impact of short selling on the 
market in times of financial crisis. For example, the Form SH 
disclosure can help Commission staff evaluate the effectiveness of some 
of our other emergency initiatives relating to short selling, such as 
our new temporary Rule 204T requiring short sellers and their broker-
dealers to deliver securities by the settlement date (three days after 
the sale transaction date, or T+3).
    In response to feedback on the Emergency Orders, we have further 
tailored the information collected. We believe that this will limit the 
expense of complying with the disclosure, while still providing us with 
the information that we need.

C. Costs

    Rule 10a-3T will impose costs on institutional investment managers 
subject to the Form SH filing requirement. We estimate that 
approximately 1,000 Form SH reports will be filed with the Commission 
each week during the period through August 1, 2009, and that each 
filing will impose an estimated reporting burden of 20 hours on the 
filer at an estimated internal cost of $3,500 per filing,\43\ plus an 
estimated $90,000 per filing in legal and filing costs for managers 
that retain the services of an outside law firm and EDGAR filing 
agent.\44\
---------------------------------------------------------------------------

    \43\ Consistent with recent rulemaking estimates, we used a $175 
per hour rate to estimate the cost of work performed internally at 
the company.
    \44\ We do not expect that all Form SH filers will retain the 
services of an outside law firm or filing agent to assist them, but 
we conservatively assume that they will for purposes of these cost 
estimates.
---------------------------------------------------------------------------

    In addition to the costs associated with the reporting burden, we 
understand that many institutional investment managers spent a 
substantial number of hours creating a reporting mechanism to capture 
the data required by Form SH when they first became subject to the 
reporting requirement under the Emergency Orders. The managers 
typically maintain an automated system to generate information about 
their short positions, and a different automated system to generate 
information about their trading activity. Due to the fact that Form SH 
requires information about the manager's short positions, as well as 
the number of securities sold short during the day, they had to create 
new programs to generate the necessary data.
    The temporary rule will also be associated with implementation 
costs. By requiring filings in XML, filers will need to reprogram 
systems to be prepared to file in XML by November 7. In addition, 
changing the form to report fewer data items will also involved 
reprogramming costs. We believe that these extra costs are justified 
because the changes help to limit the costs and improve the ability of 
the Commission to use the information in the filings.
    We recognize that the Form SH reporting requirement imposed by Rule 
10a-3T may result in increased short selling costs for participants 
that may impact legitimate short selling activities. We sought to limit 
the potential costs associated with Form SH filing under Rule 10a-3T 
by:
     Imposing the Form SH filing obligation only on 
institutional investment managers that exercise discretion over 
accounts holding section 13(f) securities having an aggregate fair 
market value of at least $100 million--these managers have experience 
with SEC filing and tend to be larger and better able to bear the cost;
     Requiring reporting only about section 13(f) securities, 
but not including options or equity securities of all public 
companies--the section 13(f) category of securities is a well-defined, 
pre-existing category of securities that institutional investment 
managers use in connection with their Form 13F filing obligations;
     Not requiring Form SH to be filed following a week in 
which the institutional investment manager did not effect any short 
sale of a section 13(f) security, even if the manager closes a short 
position during that week;
     Allowing aggregation of reporting on Form SH across 
multiple institutional investment managers;
     Establishing thresholds below which short sales need not 
be reported on Form SH; and
     Establishing a last business day of each calendar week 
reporting deadline, which should help to reduce weekend labor and 
systems time.
    We request comments on this Cost-Benefit Analysis and any of the 
costs and benefits associated with Rule 10a-3T and Form SH. We solicit 
quantitative data to assist with our assessment of the costs and 
benefits of the rule and form.
     Have we accurately estimated the costs?
     Are additional costs involved in complying with the rule? 
What are the types, and amounts, of the costs?
     Can the rule be modified to mitigate costs?
     Do the benefits justify the costs?
     Will the Form SH reporting requirements influence the day-
to-day decisions made by institutional investment managers in any 
substantive way? For example, will managers choose in some cases to 
avoid short selling, or to short through alternative vehicles such as 
OTC derivatives to avoid reporting?
     Given that Rule 10a-3T requires reporting of short sales 
and short positions, but does not require Form SH filers to report 
whether the short sales are being used to hedge other positions, does 
the Form SH information provide an accurate picture of the short 
selling activities of institutional investment managers and their 
clients? Is there an alternative reporting requirement that would more 
accurately reflect managers' true activities?
     Rule 10a-3T requires a single form that aggregates short 
positions across multiple systems and across portfolios managed for 
multiple customers. Does the aggregation process pose any special 
difficulties or impose additional costs beyond those that would be 
incurred if filers could submit separate reports for separate units or 
systems?
     How costly will it be for Form SH filers to develop the 
code needed to file Form SH in XML format? Are there less costly 
alternatives that will present the Form SH data in a machine readable 
format?

[[Page 61688]]

VII. Consideration of Burden of Competition and Promotion of 
Efficiency, Competition and Capital Formation

    Section 23(a)(2) of the Exchange Act \45\ requires us, when 
adopting rules under the Exchange Act, to consider the impact that any 
new rule would have on competition. In addition, section 23(a)(2) 
prohibits us from adopting any rule that would impose a burden on 
competition not necessary or appropriate in furtherance of the purposes 
of the Exchange Act. Section 3(f) of the Exchange Act \46\ and section 
2(c) of the Investment Company Act of 1940 \47\ require us, when 
engaging in rulemaking to consider or determine whether an action is 
necessary or appropriate in the public interest, to consider, in 
addition to the protection of investors, whether the action will 
promote efficiency, competition, and capital formation.
---------------------------------------------------------------------------

    \45\ 15 U.S.C. 78w(a)(2).
    \46\ 15 U.S.C. 78c(f).
    \47\ 15 U.S.C. 80a-2(c).
---------------------------------------------------------------------------

    We believe that Rule 10-a3T will not have an adverse impact on 
competition among the institutional investment managers required to 
file Form SH and other parties effecting short sales because the 
Commission will keep Form SH information nonpublic to the extent 
permitted by law. We have received comments indicating that the 
information required by Form SH is highly proprietary and could be used 
to try and reverse engineer an institutional investment manager's 
trading strategy.\48\ In addition, there is a concern that public 
disclosure could inaccurately suggest that the managers effecting short 
sales have a negative view of some issuers' prospects given that short 
sales may be a part of some managers' routine hedging strategies.\49\
---------------------------------------------------------------------------

    \48\ See, for example, letter from WilmerHale dated October 10, 
2008 available in file No. S7-24-08.
    \49\ Id.
---------------------------------------------------------------------------

    Further, the rule imposes similar costs on institutional investment 
managers of similar size, given that only larger institutional 
investment managers subject to the Form 13F filing requirement are 
subject to the Form SH filing requirement. Therefore, it does not 
create any competitive disadvantages among these managers. Rule 10a-3T 
could, however, create an advantage for smaller institutional 
investment managers that are not subject to the Form SH filing 
requirement as compared to the larger filers. We believe any burden on 
competition imposed by the rule is necessary or appropriate in 
furtherance of the purposes of the Exchange Act because the rule will 
assist us in addressing concerns that short selling may be used to 
manipulate the stock of issuers.
    To the extent Rule 10a-3T achieves its objective of combating 
market manipulation, the rule should promote efficiency and capital 
formation by increasing investor confidence and strengthening the 
market's ability to correctly incorporate accurate information into 
securities prices. We request comment on these matters in connection 
with the rule.

VIII. Regulatory Flexibility Certification

    Section 3(a) of the Regulatory Flexibility Act requires the 
Commission to undertake a Regulatory Flexibility Analysis of the effect 
of its rules on small entities unless the Commission certifies that the 
rules do not have a significant economic impact on a substantial number 
of small entities.\50\ Pursuant to Section 605(b) of the Regulatory 
Flexibility Act, the Commission hereby certifies that Exchange Act Rule 
10a-3T and Form SH do not have a significant impact on a substantial 
number of small entities.\51\ A ``small entity'' is defined under Rule 
0-7 of the Investment Advisers Act of 1940 for purposes of the 
Regulatory Flexibility Act as an investment adviser that:
---------------------------------------------------------------------------

    \50\ 5 U.S.C. 603(a).
    \51\ Although the requirements of the Regulatory Flexibility Act 
do not apply to rules adopted under the Administrative Procedure 
Act's ``good cause'' exception, see 5 U.S.C. 601(2) (defining 
``rule'' and notice requirements under the Administrative Procedure 
Act), we have nevertheless provided this certification.
---------------------------------------------------------------------------

     Has assets under management and reported in its annual 
updating amendment to Form ADV of less than $25 million;
     Did not have total assets of $5 million or more on the 
last day of its most recent fiscal year; and
     Does not control, is not controlled by, and is not under 
common control with another investment adviser that has assets under 
management of $25 million or more, or any person (other than a natural 
person) that had total assets of $5 million or more on the last day of 
the most recent fiscal year.
    Rule 10a-3T requires only an institutional investment manager that 
exercises investment discretion over investment accounts holding 
section 13(f) securities having an aggregate fair market value of at 
least $100 million on the last trading day of a month that is relevant 
to the period covered by the rule to file Form SH with the Commission. 
Therefore, we do not expect the rule to affect a significant number of 
small entities under the definition of ``small entity'' set forth 
above. Not all of the institutional investment managers that may be 
required to file Form SH are registered as investment advisers under 
the Investment Advisers Act. Despite the fact that the Rule 0-7 
definition of a small entity is designed for purposes of the Investment 
Advisers Act, it also provides a useful basis for determining whether 
unregistered investment advisers are small entities.
    We solicit comment on the certification. Commenters are asked to 
describe the nature of any impact on small entities and provide any 
empirical data.

IX. Statutory Basis and Text of Amendments

    We are adopting amendments to rules pursuant to sections 3(b), 10 
and 23(a) of the Exchange Act, as amended.

List of Subjects in 17 CFR Parts 240 and 249

    Reporting and recordkeeping requirements, Securities.

0
In accordance with the foregoing, the Securities and Exchange 
Commission is amending Title 17, chapter II of the Code of Federal 
Regulations as follows:

PART 240--GENERAL RULES AND REGULATIONS, SECURITIES EXCHANGE ACT OF 
1934

0
1. The authority citation for part 240 continues to read, in part, as 
follows:

    Authority: 15 U.S.C. 77c, 77d, 77g, 77j, 77s, 77z-2, 77z-3, 
77eee, 77ggg, 77nnn, 77sss, 77ttt, 78c, 78d, 78e, 78f, 78g, 78i, 
78j, 78j-1, 78k, 78k-1, 78l, 78m, 78n, 78o, 78p, 78q, 78s, 78u-5, 
78w, 78x, 78ll, 78mm, 80a-20, 80a-23, 80a-29, 80a-37, 80b-3, 80b-4, 
80b-11, and 7201 et seq.; and 18 U.S.C. 1350, unless otherwise 
noted.
* * * * *

0
2. Section 240.10a-3T is added to read as follows:

Sec.  240.10a-3T  Temporary Rule for reporting short sales by 
institutional investment managers.

    (a)(1) For purposes of this section, the terms ``investment 
discretion'' and ``section 13(f) securities'' shall have the meanings 
set forth in Sec.  240.13f-1(b) and Sec.  240.13f-1(c), respectively.
    (2) For purposes of this section, the term ``short sale'' shall 
have the meaning set forth in Sec.  242.200(a) of this chapter, and, 
for purposes of Form SH a ``short position'' is the aggregate gross 
short sales of an issuer's section 13(f) securities (excluding 
options), less purchases to close out a short sale in the

[[Page 61689]]

same issuer. The Form SH short position is not net of long position in 
the issuer. If a person that has loaned a security to another person 
sells the security and a bona fide recall is initiated within two 
business days after trade date, the person that has loaned the security 
is deemed to own the security for purposes of Rule 200(g)(1) and Rule 
200(b) of Regulation SHO, and such sale will not be treated as a short 
sale.
    (b)(1) Every institutional investment manager that exercises 
investment discretion with respect to accounts holding section 13(f) 
securities that has filed, or was required to file, a Form 13F (Sec.  
249.325 of this chapter) for the calendar quarter, as required under 
Section 13(f) of the Act (15 U.S.C. 78m(f)) and Sec.  240.13f-1(a) 
thereunder, shall file a report on Form SH (Sec.  249.326T of this 
chapter) with the Commission on the last business day of each calendar 
week immediately following a calendar week in which the institutional 
investment manager has effected a reportable short sale with respect to 
a section 13(f) security that is not an option.
    (2) An institutional investment manager is not required to file 
Form SH to report short sales or short positions of section 13(f) 
securities on Form SH where:
    (i) No short sales of a section 13(f) security have been effected 
during the reporting period to be covered by the Form SH filing; or
    (ii) On each calendar day during the calendar week, the start of 
day short position, the gross number of securities sold short during 
the day and the end of day short position each constitute less than 
one-quarter of one percent of that class of the issuer's section 13(f) 
securities issued and outstanding as reported on the issuer's most 
recent annual, quarterly or current report filed with the Commission 
pursuant to section 13 of the Exchange Act, unless the manager knows or 
has reason to believe the information contained therein is inaccurate, 
and the fair market value of the start of day short position, the gross 
number of securities sold short during the day and the end of day short 
position each are less than $10,000,000.
    (3) Once a determination is made that a Form SH filing is required, 
an institutional investment manager is not required to report short 
sales or short positions of section 13(f) securities on Form SH where:
    (i) On any calendar day of the calendar week, the start of day 
short position, the gross number of securities sold short during the 
day, or the end of day short position in the section 13(f) security 
constitutes less than one-quarter of one percent of that class of the 
issuer's section 13(f) securities issued and outstanding as reported on 
the issuer's most recent annual, quarterly or current report filed with 
the Commission pursuant to section 13 of the Exchange Act, unless the 
manager knows or has reason to believe the information contained 
therein is inaccurate, and the fair market value of the start of day 
short position, the gross number of securities sold short during the 
day, or the end of day short position is less than $10,000,000. The 
institutional investment manager must designate in the appropriate data 
element its reliance on this exception with respect to information 
otherwise required to be reported; or
    (ii) A broker-dealer seeks to execute a customer order, either in 
whole or in part, through a riskless principal transaction, and a short 
sale results from a sale order of a customer who is net long the 
section 13(f) security, or a purchase order of a section 13(f) 
security.
    (4) The Form SH shall be nonpublic to the extent permitted by law.
    (c) A report on Form SH shall identify the date of the transaction, 
the institutional investment manager by EDGAR Central Index Key, the 
issuer name and CUSIP for the relevant securities and reflect the start 
of day short position, the gross number of securities sold short during 
the day, and the end of day short position, on each day of the calendar 
week in which short sale trading activity occurred.
    (d) This section will expire on August 1, 2009.

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
3. The authority citation for Part 249 continues to read in part as 
follows:

    Authority: 15 U.S.C. 78a et seq. and 7201 et seq.; and 18 U.S.C. 
1350, unless otherwise noted.
* * * * *

0
4. Add Sec.  249.326T and Temporary Form SH to read as follows:

Sec.  249.326T  Form SH, weekly report of short sales and positions.

    (a) This form shall be used by institutional investment managers to 
file weekly reports pursuant to Sec.  240.10a-3T of this chapter. A 
weekly report on this form pursuant to Sec.  240.10a-3T of this chapter 
shall be filed on the last business day of each calendar week 
immediately following a calendar week in which the institutional 
investment manager effected a short sale and shall be nonpublic to the 
extent permitted by law.
    (b) The temporary section will expire on August 1, 2009.

    Note: The text of Form SH does not, and this amendment will not, 
appear in the Code of Federal Regulations.

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                              OMB APPROVAL
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OMB Number: 3235-0646
Expires: April 30, 2009
Estimated average burden hours per response: 20.0
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UNITED STATES SECURITIES AND EXCHANGE COMMISSION

Form SH

Weekly Report of Short Sales and Short Positions

General Instructions

    1. Rule as to Use of Temporary Form SH (``Form SH''). 
Institutional investment managers (``Managers'') that exercise 
investment discretion with respect to accounts holding section 13(f) 
securities, as defined in rule 13f-1(c) under the Securities 
Exchange Act of 1934 [15 U.S.C. 78m(f)] (``Exchange Act''), who have 
filed or were required to file a Form 13F for the previous calendar 
quarter, must file a nonpublic report on Form SH with the Commission 
to report certain information about short sales and short positions. 
The nonpublic Form SH filing must be made on the last business day 
of each calendar week immediately following a Form SH reporting 
period (i.e., the preceding Sunday-Saturday calendar week) in which 
the Manager entered into any new short positions with respect to any 
section 13(f) securities except for any short positions for options 
(``SH Short Positions''). The nonpublic Form SH will report SH Short 
Positions for the Sunday-Saturday calendar week that precedes the 
date on which the Form SH is due to be filed.
    2. Rules to Prevent Duplicative Reporting. If two or more 
Managers that are required to file a report on Form SH for the 
reporting period exercise investment discretion with respect to the 
same securities, only one such Manager must include information in 
its reports on Form SH. A Manager whose information is reported on 
Form SH by another Manager (or Managers), must identify the 
Manager(s) reporting on its behalf.
    3. Filing of Form SH. A Form SH report that is filed by a 
Manager with the Commission shall be nonpublic to the extent 
permitted by law. A Manager must label its Form SH as non-public by 
adding the phrase NONPUBLIC (in bold and capital letters) at the top 
and bottom of each page of the form with the exception of the XML 
tagged data file containing transaction data. A Manager must file a 
Form SH report with the Commission on the last business day of each 
calendar week immediately following the preceding calendar week 
period (Sunday--Saturday) in which the Manager has entered into any 
new SH Short Position(s) in accordance with Rule 232.13 of 
Regulation S-T [17 CFR 232.13]. The Form SH must be

[[Page 61690]]

filed electronically using the Commission's EDGAR system.
    4. Official List of Section 13(f) Securities. The Official List 
of Section 13(f) Securities published by the Commission (the ``13F 
List'') lists the securities the holdings of which a Manager is to 
report on Form 13F. See rule 13f-1(c) [17 CFR 240.13f-1(c)]. Form SH 
filers may rely on the current 13F List in determining whether they 
need to report on Form SH information about any particular equity 
security, excluding short positions for options that are on the 13F 
List. The 13F List is available on the SEC's Web site, at http://
www.sec.gov/divisions/investment/13flists.htm. Paper copies are 
available at a reasonable fee from the Securities and Exchange 
Commission, Public Reference Room, 100 F Street, NE., Washington, DC 
20549-1520.

Paperwork Reduction Act Information

    The Office of Management and Budget has approved this collection 
of information pursuant to 44 U.S.C. 3507 and 5 CFR 1320.13. The OMB 
control number for this collection of information is 3235-0646. An 
agency may not conduct or sponsor, and a person is not required to 
respond to, a collection of information unless it displays a 
currently valid control number. We estimate that providing the 
requested information will take, on average, approximately 20 hours. 
Any member of the public may direct to the Commission any comments 
concerning the accuracy of this burden estimate and any suggestions 
for reducing this burden.
    Filings with the form types set forth in this instruction will 
be filed on a nonpublic basis.

UNITED STATES

SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, DC 20549

TEMPORARY FORM SH

WEEKLY REPORT OF SHORT SALES AND SHORT POSITIONS

Report for the Period Ended: [Month, Day, Year]------------------------

Check here if Amendment [ ]; Amendment Number:-------------------------

    This Amendment (Check only one):
[ ] is a restatement.
[ ] adds new entries.
    Institutional Investment Manager Filing this Report:

Name:------------------------------------------------------------------

Address:---------------------------------------------------------------

-----------------------------------------------------------------------

-----------------------------------------------------------------------

Form 13F File Number: 28-----------------------------------------------

Central Index Key (CIK) Number:----------------------------------------

    The institutional investment manager filing this report and the 
person by whom it is signed hereby represent that the person signing 
the report is authorized to submit it, that all information 
contained herein is true, correct and complete, and that it is 
understood that all required items, statements, schedules, lists, 
and tables, are considered integral parts of this form.
    Person Signing this Report on Behalf of Reporting Manager:

Name:------------------------------------------------------------------

Title:-----------------------------------------------------------------

Phone:-----------------------------------------------------------------

Signature, Place, and Date of Signing

-----------------------------------------------------------------------

[Signature]

-----------------------------------------------------------------------

[City, State]
-----------------------------------------------------------------------

[Date]

    Report Type (Check only one):
    [ ] FORM SH ENTRIES REPORT. (Check here if all entries of this 
reporting manager are reported in this report.)
    [ ] FORM SH NOTICE. (Check here if no entries reported are in 
this report, and all entries are reported by other reporting 
manager(s).)
    [ ] FORM SH COMBINATION REPORT. (Check here if a portion of the 
entries for this reporting manager is reported in this report and a 
portion is reported by other reporting manager(s).)
    List of Other Managers Reporting for this Manager:
    Provide a list of the name(s), Form 13F file number(s) and CIK 
numbers of all institutional investment managers who are reporting 
for this manager.

[If there are no entries in this list, state ``NONE''.]
Number of Other Included Managers:-------------------------------------

Total Number of Transactions Reported:
-----------------------------------------------------------------------

    List of Other Included Managers:
    Provide a numbered list of the name(s), Form 13F file number(s) 
and CIK numbers of all institutional investment managers with 
respect to which this Form SH report is filed, other than the 
manager filing this report.

[If there are no entries in this list, state ``NONE''.]

                                                                    Information Table
--------------------------------------------------------------------------------------------------------------------------------------------------------
            Element 1                  Element 2           Element 3           Element 4           Element 5           Element 6           Element 7
--------------------------------------------------------------------------------------------------------------------------------------------------------
Date............................  CIK of Manager....  Name of Issuer....  CUSIP.............  Short Position      Number of           Short Position
                                                                                               (Start of Day).     Securities Sold     (End of Day).
                                                                                                                   Short (Day).
--------------------------------------------------------------------------------------------------------------------------------------------------------

* * * * *

    By the Commission.
Florence E. Harmon,
Acting Secretary.
[FR Doc. E8-24895 Filed 10-16-08; 8:45 am]

BILLING CODE 8011-01-P