To address the SEC’s new US short reporting requirements, FundApps has released a 13f-2 service to ensure our clients are covered when the new regulation comes into effect in January 2025.

Using the same datasets already being sent to FundApps daily, our rule engine will calculate disclosure requirements based on the monthly average percentage and nominal values or the daily nominal values for non-reporting company issuers.

The new 13f-2 follows the workflow logic every FundApps user is already familiar with while introducing new design solutions to address the specific requirements of the US short-selling regulation. The page is divided into 3 main sections.

The page includes two result tables. The table on the left provides the user with an overview of all asset classes being monitored by the 13f-2 rules, including both reporting and non-reporting company issuers. Selecting an asset class on the left will populate a table on the right-hand side, which provides a detailed view of how the respective 13f-2 position has changed over the course of the month.

For detailed information about the different 13f-2 results types, follow the link here.

The Exposure Timeline gives clients a visual representation of the change in position of the asset class selected previously in the Results Table. Users can toggle between the USD Market Value and the Class Shares Percentage graphs for reporting company issuers and are shown the USD Market Value for non-reporting issuers. The thresholds can be highlighted in the graph as well and for reporting company issuers, the averages are displayed.

Once a user selects a NAV Date either on the result table on the right-hand side or on the exposure timeline, the asset details are displayed at the bottom of the page. This view is similar to the asset details view users are already familiar with from the Shareholding Disclosure and Sensitive Industries services.

Q: Will FundApps cover form SHO?
​A: Yes, FundApps will enable users to generate the form SHO within the platform. At this point, we are waiting for the SEC to release the XML schema, and we will keep clients posted on any updates regarding the form SHO. Please note we will cover the main submission and not the potential requirement to submit additional cover pages/notices for other entities. This is also in line with our current 13F offering.

Q: How does FundApps distinguish between reporting and non-reporting company issuers?
​A: FundApps has developed an issuer-level property, IsReportingCompanyUS. This is an optional property and will serve as an additional check in conjunction with MarketsListedIn, allowing you to have direct control over the threshold an issuer falls in scope of, leading to more accurate results. If set to true, the issuer will be treated as a reporting company issuer and fall in Threshold A's scope.

FundApps is aware that sourcing the required information to populate IsReportingCompanyUS may be difficult. As such, we’re offering a solution that will enrich this data using information from the SEC’s EDGAR database for issuers filing 10K, 20F, and 40F reports. This dataset will identify which threshold the issuer is in scope for, either Threshold A or Threshold B. If you are interested in learning more about this, please reach out to your account manager.

Q: How does FundApps account for issuers that have switched their status from non-reporting to reporting company issuer or vice versa during a calendar month?

A: FundApps will highlight the fact that an issuer has been monitored under different thresholds during a calendar month by indicating this change in the Threshold column. The 13f-2 service will retain the results triggered under the respective thresholds and add “Switched” in the threshold column to allow for an easier review:

Please note that this can be due to a valid change in an issuer’s reporting status but can also occur for clients who do not rely on the 13f-2 data enrichment service if the MarketsListedIn property changes. Once users encounter this scenario, a further review will be required.

Q: How does FundApps satisfy the requirement to calculate exposure as per the settlement day?
​A: FundApps allows clients to provide a property named QuantitySettle, which represents the number of shares held on the settlement date. The engine will use this settlement quantity to calculate the 13f-2 short exposure if this property is included in the file. However, during our market analysis some clients have indicated they cannot reliably provide quantities as of the settlement date. Therefore, we decided to include logic in our rule set to default to using the "normal" Quantity property to calculate the 13f-2 results if QuantitySettle is not provided.

Q: Will FundApps require transaction data for the rule calculation or form SHO?
​A: No, FundApps does not require transaction data in addition to the daily positions file already provided to the platform by our clients. The information needed by the monthly average calculation for reporting company issuers, the nominal value calculation for non-reporting company issuers, and the daily net-short change, which will need to be populated in form SHO, can all be derived from the daily position file.

Q: How does FundApps account for US Holidays when calculating the holdings relevant for 13f-2?

A: US holidays and weekends are excluded from the average calculation for reporting company issuers that generate results under threshold A. This means that any position uploaded on these days to the FundApps platform will not be included in the threshold A calculations.

However, please note that for holdings in non-reporting company issuers that generate threshold B results, the engine will include positions uploaded on US holidays and the weekend to determine if the value threshold of $500,000 has been crossed. The reason is that non-reporting company issuers, who are mostly non-US issuers, might be traded on non-US exchanges that don’t adhere to US holidays/weekends.

Q: How does FundApps treat unknowns that affect 13f-2 results?

A: FundApps will highlight missing data by triggering an Unknown alert for the monthly result for a 13f-2 issuer in the left-hand table if there are any daily results for this issuer affected by missing data. The service will also highlight the specific day/days when missing data affected the calculation in the right-hand table.

Additionally, missing data affecting the 13f-2 results will be shown on the Missing Data page, which aligns with the behaviour users are already familiar with in the context of the Shareholding Disclosure service.