SEC chair calls for short-sale reporting

The US Securities and Exchange Commission may require hedge funds to disclose their short-sale positions and plans to subpoena the funds' communication records in an effort to stem turmoil in stock markets.

Hedge funds and investors managing more than $100 million in securities would be "required to promptly begin public reporting of their daily short positions", Chairman Christopher Cox said in a statement late on Wednesday. The agency will obtain "disclosure from significant hedge funds" regarding "past trading positions in specific securities," Cox said.

Lawmakers including US Senate Banking Committee Chairman Christopher Dodd and executives such as Morgan Stanley Chief Executive Officer John Mack say short sellers may have contributed to the market crisis by spreading false information and using abusive tactics to attack companies. Hedge funds argue that poor business strategies are to blame, not short sellers.