Brokers Must Now Tag Special Short Sales—SEC Says So
Published Date: 12/31/2025
Notice
Summary
MEMX is updating its rules to make sure brokers 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 clear and accurate for everyone involved. The new rule kicks in right away, so brokers need to follow it now—no extra costs, just smoother reporting!
Analyzed Economic Effects
2 provisions identified: 2 benefits, 0 costs, 0 mixed.
Brokers Must Report BFMM Short Sales
If you are an Industry Member (a broker-dealer that trades equities), the Exchange requires you to record and report to the Consolidated Audit Trail (CAT) whether the original receipt or origination of an order to sell an equity security is a short sale for which a market maker claims the bona fide market making exception in Rule 203(b)(2)(iii) of Regulation SHO. This new reporting requirement is added as subparagraph (G) to Rule 4.7(a)(2) to implement paragraph (D) of Section 6.4(d)(ii) of the CAT NMS Plan.
Rule Change Is Immediately Operative
The Commission designated the MEMX amendment to Rule 4.7 to be operative upon filing, so Industry Members are required to follow the amended CAT reporting rule immediately after the filing on December 11, 2025. The Commission waived the usual 30-day operative delay under Rule 19b-4(f)(6)(iii).
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