traders work on the floor of the new york stock exchange nyse in new york city us february 15 2022 reutersbrendan mcdermid washington feb 25 reuters  the us securities and exchange commission sec on friday unveiled a pair of proposals that would broaden the data short sellers who bet that stocks will fall disclose to investors and the regulator in a bid to boost transparency around such trades the new rules would offer the public visibility into aggregated data around large short positions for individual equity securities the sec said the proposals would also impose a buytocover mandate for brokers to identify sales as long short or shortexempt said the sec in its release which added that the classifications would only be required if a purchaser has any short position in the same security at the time of order and would further amend the national market system plan to include a report of such buytocover information fridays measures which are subject to public consultation comes after sec chief gary gensler told congress last year he would step up scrutiny and mandate expanded disclosures following the january 2021 gamestop gmen saga and the meltdown of archegos capital read more it also follows moves by the financial industry regulatory authority finra to change its shortinterest reporting requirements and a probe by the us justice department into suspected manipulative trading by short sellers and hedge funds read more short sellers borrow shares from brokers and then sell them into the market with the agreement that they will buy the shares back and return them to the lender at a later date if the price has fallen the short seller can buy the shares back at a lower price than they paid for them locking in a profit the proposal by the wall street regulator would specifically apply to institutional investment managers with a short position of at least 10 million or the equivalent of at least 25 of the total shares outstanding the sec said it would also apply to those who hold a short position of at least 500000 in an equity security of a nonreporting issuer the proposal is meant to force investment managers to exercise discretion over short positions and would provide more visibility into their behavior said gensler the agency would take the raw data and analyze it to better understand the role short selling may play in market events before aggregating it for the publics eyes he added its important for the public and the commission to know more about this important market especially in times of stress or volatility