The SEC would then publish such data, aggregated by security and with manager information kept confidential.
Institutional investment managers subject to the proposed changes are those with a short position of at least $10 million, or at least 2.5% of shares outstanding, and money managers with a short position of at least $500,000 in a non-reporting issuer equity security, the SEC said.
SEC Chair Gary Gensler said the rule comes as a result of a congressional mandate, directing the SEC to enhance transparency of short sale activity.
"This rule addresses Congress's mandate and improves upon existing sources of short sale-related data in the equity markets," he said in a news release.
Bryan Corbett, president and CEO of the Managed Funds Association, said in an Oct. 13 statement: "MFA is disappointed that the final rule places burdensome and costly reporting requirements on investment managers instead of adjusting, consolidating, and leveraging data already collected."
In tandem with the rule, the commission adopted an amendment to the National Market System plan governing the Consolidated Audit Trail, or CAT, in another 3-2 vote. The amendment requires CAT reporting firms to indicate if they use the bona fide market making exception, as featured in the SEC's short sale rules.
The American Securities Association said in a statement it has privacy concerns over the CAT.
"The SEC has again sought to expand information collected under the CAT without first addressing the significant privacy and cybersecurity concerns that the CAT presents," Chris Iacovella, ASA president and CEO, said in the organization's Oct. 13 statement. "The SEC's rulemaking today is much less important than safeguarding the fundamental privacy rights of American investors."