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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Key Dates
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Previous: 2025-20537 — Self-Regulatory Organizations; Cboe BZX Exchange, Inc.; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change To Amend Rule 4.7 of the Exchange's CAT Compliance Rule
Cboe BZX Exchange is updating its rules to make sure broker-dealers report if a stock sale order is a special kind of short sale used by market makers. This change matches a new national rule and helps keep trading data accurate and clear. The update is effective immediately and affects anyone who reports trades to the Consolidated Audit Trail, with no new fees involved.
Next: 2025-20539 — Self-Regulatory Organizations; Miami International Securities Exchange, LLC; Notice of Filing and Immediate Effectiveness of a Proposed Rule Change to Amend Rule 1703, Consolidated Audit Trail Compliance Rule-Industry Member Data Reporting
Miami International Securities Exchange (MIAX) is updating its rules to make sure broker-dealers report if a stock sale order is a special kind of short sale called a bona fide market making exception. This change helps keep trading data accurate and follows new national rules. The update is effective immediately, so affected firms should start reporting this info right away—no extra costs, just clearer data!