The Reg SHO Threshold List is a daily list published by the SEC that identifies securities for which there have been an aggregate of 10,000 shares or more of failure to deliver (FTD) at a clearing agency for five consecutive settlement days. Its primary purpose is to address persistent failures to deliver shares, which can indicate potential market manipulation or issues with the settlement process.
When a stock appears on the Reg SHO Threshold List, it signifies that there's been a sustained inability to deliver shares on time. This can arise from various factors, including naked short selling, operational issues, or simply high demand for borrowing shares that are not readily available in the market. For a security to be removed from the list, it must not have an aggregate FTD position of 10,000 shares or more for five consecutive settlement days.
For investors, a stock's presence on the Reg SHO list can be an important signal. While it doesn't automatically imply illegal activity, it often correlates with high short interest and can sometimes precede significant price volatility. Fintel provides comprehensive data on Reg SHO, including the daily threshold list, historical FTD data, and detailed short interest metrics, allowing users to track these trends and assess their potential impact on specific securities. Analyzing the duration a stock remains on the list and the magnitude of its FTDs can offer insights into the underlying supply-demand dynamics and potential for short squeezes.
