About the Reg SHO threshold list
A threshold security is a stock or ETF with fails to deliver at a registered clearing agency of at least 10,000 shares, equal to at least 0.5% of its shares outstanding, for five consecutive settlement days. Each listing market publishes its threshold list every trading day: Nasdaq, NYSE (covering NYSE, NYSE American and NYSE Arca), Cboe BZX, and FINRA for OTC equities. Finshort collects all four lists every night and counts how many consecutive settlement days each security has been listed.
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Under Rule 203(b)(3) of Regulation SHO, a clearing firm with a fail in a threshold security that has stayed open for 13 consecutive settlement days must close it out by buying shares. Until it does, it and the brokers it clears for cannot accept short sales in that security without first borrowing the shares or arranging to borrow them.
Frequently asked questions
How does a stock get on the threshold list?
It must have fails to deliver of at least 10,000 shares that are also at least 0.5% of its shares outstanding for five consecutive settlement days. The market where it is listed then adds it to that day's list, and it comes off the list once it no longer meets that test.
What does days on list mean?
The number of consecutive settlement days the security has appeared on its market's list, counting back from the latest list. Only days for which Finshort holds that market's list count, so a missing file ends a run instead of joining two runs together. A "+" means the run began on or before the first list in our history, so the true count may be higher.
Is a stock on the threshold list being naked shorted?
Not necessarily. A listing means fails to deliver have been large and persistent, but fails can come from long sales and operational problems as well as short sales. ETFs show up often, in part because market makers can sell new ETF shares before those shares are created.
When is the list updated?
Each market publishes its list for a trading day after that day's close. Finshort checks every 30 minutes from 10 PM to 1:30 AM Eastern, then again at 7 and 7:30 AM for lists posted late.