REGULATION SHO MONITORING
Stay ahead of Regulation SHO risk
Automated oversight of order marking and locates so you can catch issues early, fix systemic gaps, and prevent costly violations.
Ensure that sales orders are correctly marked long or short
Verify that short sales have valid locates on a daily basis
Identify mismarking issues daily
Prevent accumulating systemic Regulation SHO issues
Relevant rules
Addresses the primary Regulation SHO requirements for broker-dealers that allow its client to effect short sales, specifically:
Rule 200(g), which requires broker-dealers monitor whether clients (or an order management system) is properly marking sale orders long or short.
Rule 203(b), which requires broker-dealers to monitor whether short sale orders for which there were no locates were prevented.
Common deficiencies
Order management system failure to properly mark sale orders long or short.
Order management system failure to prevent short sale orders for which there were no locates (either on the Easy-to-Borrow list or individually located).
Knowtice’s prevention plan
Knowtice’s Regulation SHO monitoring report continuously tracks intraday stock positions and orders, generating exceptions for any single mismarked sale order or missing locate.
Real findings. Real fines
Recent fines of broker-dealers highlight the necessity of utilizing technological solutions to systematically monitor Regulation SHO compliance.
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Use our Regulation SHO Monitoring tool to prevent costly fines!
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