Short selling involves borrowing a stock to sell it in the expectation the price will fall, then repurchasing the shares and pocketing the difference.
The practice has long been divisive, with critics accusing short sellers of trying to hurt companies, and short sellers arguing they help root out fraud and corporate misconduct.
Since at least 2021, the Justice Department and the SEC have also been investigating potential manipulation by short sellers and hedge funds around the publication of negative research reports.
SEC officials said the new rules, which the commission agreed upon in a 3-2 vote, support the agency's efforts to police the practice.
Specifically, institutional investors will have to report gross short positions to the SEC monthly and certain "net" short activity for individual dates on which trades settle.
Persons:
Jim Bourg, Gary Gensler, FINRA, Douglas Gillison, Chris Prentice, Michelle Price, Chizu Nomiyama, Chris Reese
Organizations:
U.S . Securities, Exchange Commission, SEC, REUTERS, GameStop, Financial Industry Regulatory Authority, Partners, Justice Department, Thomson
Locations:
Washington, U.S