SEC Tweaks Short Sale Rules: Because Trading Data Needs More Clarity
Published Date: 11/21/2025
Notice
Summary
Cboe Exchange is updating its rules to make sure brokers report if a stock sale is a special kind of short sale where market makers get an exception. This change helps keep trading data clear and follows new national rules. It’s effective right away, so brokers need to start reporting this info now, but it doesn’t cost them extra money.
Analyzed Economic Effects
2 provisions identified: 1 benefits, 1 costs, 0 mixed.
Brokers must flag BFMM short sales
If you are a broker or industry member that trades equities, you must record and report to the Consolidated Audit Trail (CAT) for the original receipt or origination of any order to sell an equity security whether the order is a short sale where a market maker claims the bona fide market making exception in Rule 203(b)(2)(iii) of Regulation SHO. The Exchange filed this change on September 29, 2025 and the Commission designated it operative upon filing, so firms must start reporting this information immediately.
Rule applies equally and is industry-wide
The amendment applies equally to all Industry Members that trade equity securities and implements an amendment to the national CAT NMS Plan requiring this reporting. The Exchange notes that all national securities exchanges and FINRA are proposing similar CAT Compliance Rule amendments and states it does not believe the change will result in a burden on competition.
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