Investor A is long 100 shares and wants to sell. They enter the order through their broker that is routed to a market maker. That market maker will go out and sell the stock into the market before they have bought the stock from you/your broker to close out their account. They do not take possession first as there is no guarantee they can sell the order into the market. By this Notice, the actual sale INTO the market is a short sale because the market maker sold the stock into the market BEFORE they had purchased the stock from you. It is a technicality since they know there position will be closed out minutes later when they go in and buy your shares. To avoid doubling up on trade volume and distorting the picture, only the sale into the market (consolidated tape) is recorded and not the second leg which was the sale transaction between seller and market maker.
So to relate this to Identa ... if a trade to sell IDTA is started by an MM with the “sell” portion first, and is matched the following day (which is within the Fail to Deliver period), it will show up as a “short” sale. It just means the IDTA paper hasn’t cleared on the day the “sell” portion of the trade occurred.
Be careful relying on the “short sell” data as it may not truly be indicative of a short position in Identa. It may indicate only that clearing has not taken place on the day the “sell” order was entered.
Clearing processes used to take 3 days which renders daily short sale information as moot. To get a better handle on any short position that may exist in IDTA, look at the bi-monthly FINRA data. That data would show open short positions after clearing activities.
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