What the Threshold List Does Not Reveal
The Threshold List is simply a list of the companies which, for that particular day, qualified for threshold status. The Threshold List does not:
reflect the short position in a particular security, but failures to deliver for long and short positions;
reflect the number or total amount of failures to deliver for the day;
mean that any improper short sale or long sale activity has occurred or is occurring for the securities listed;
reflect only failures to deliver because (i) a security may remain on the Threshold List longer than 13 days after broker-dealers close-out all delivery failures, since the security stays on the threshold list for five consecutive days; (ii) new delivery failures resulting from long or short sales that crossed the threshold, keeping the security on the SRO's threshold securities list; or (iii) the delivery failures may have been occurred prior to a security's appearance on the Threshold List, and may be grandfathered on the list from the close-out requirement of Regulation SHO.
It should also be borne in mind that since the threshold list is in part based on the number of shares any company has issued and outstanding, unreported stock issuances can and will land the stock on the SHO list when in reality there are no significant failures to cover.
