SunGard Opens a Window into the Opaque World of Short Selling

24 March 2009

SunGard has launched an online market data service that will help corporate executives anticipate if short sellers are targeting their share price. SunGard’s Short Insights will help CEOs, CFOs and investor relations professionals stay informed of lending activity in the shares of their company, which is often viewed as a proxy for short selling, and also the shares of their competitors on a daily basis.

Tim Smith, senior vice president at SunGard’s Astec Analytics, said: “The SEC is evaluating reinstatement of the “uptick rule” because of the concern that selected stocks could be targeted for bear raids without adequate price checks in place. This same concern is often expressed in boardrooms where short sales are regarded as a threat to share price stability. With Short Insights from SunGard, corporate executives now have a tool at their disposal to help monitor and evaluate the performance of their company relative to that of their competitors as seen through the window of the securities lending industry.”

Regulators are considering reinstating the uptick rule to protect investors from stock manipulation and precipitous stock declines. The uptick rule, which was established in 1938, was abolished by the Securities and Exchange Commission on July 6, 2007 and is thought by some commentators to have contributed to market declines. In the middle of 2008, short selling was at record levels.

Mr. Smith added: “SunGard’s Short Insights provides corporate executives with a multi-dimensional view of the securities lending activity in their stock each day. Shares-on-loan data as reported on U.S. and some other exchanges are often delivered on a delayed basis up to two weeks in arrears. We provide data next day and have enhanced shares-on-loan data with cost-to-borrow data, neither of which has previously been available to the general public.”

Comparison of shares-on-loan and cost-to-borrow with other companies in the same business sector provides insight into how investors view relative value and helps identify unique pressure on a company’s stock price. Subscribers to Short Insights can also create a “watch list” of companies that are of particular interest. Short Insights is available 24/7 via the Internet and is supplemented by e-mail alerts notifying subscribers of significant changes in their company’s data.

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