@startmindmap
title Regulation SHO Rule 200
!include theme_mindmap.puml

* Regulation SHO Rule 200
** Ownership of Stock
*** An investor is considered long if they:
**** Have title to the security.
**** Have a contract to purchase the security but haven't received the shares yet (unsettled purchase).
**** Own a convertible bond or preferred stock and have given conversion instructions.
**** Own a call option or derivative and have exercised it.
**** Hold security futures to purchase the stock and have received notice of physical delivery.
*** Additional Notes
**** Selling stock futures doesn't require borrowing shares since delivery is not immediate.
**** Owning a convertible security and giving conversion instructions means the investor owns the stock.
**** Long or short position is determined based on trades throughout the day.
** Marking Orders
*** If the broker-dealer has the security or expects to have it before settlement, and the investor meets the ownership criteria, the order can be marked as long.
*** If the conditions are not met, the order must be marked as a short sale.
** Broker-Dealer Short Sales [[./key_concepts.puml]]

*** Broker-dealers can mark order tickets for their own account as long if they:
**** Acquired shares as a block positioner and established a short position to hedge or arbitrage the block.
**** Are unwinding an index arbitrage position using futures or options contracts.
**** Are short the stock due to arbitrage or hedging activities.
**** The sale occurs on a day when the NYSE is down less than 2% from the previous day's close.
** Broker-Dealer Aggregation of Positions
*** Broker-dealers must aggregate all long and short positions firm-wide to determine how to mark their own order tickets.
*** They may qualify for independent trading unit aggregation under certain conditions.
** Independent Trading Unit Aggregation
*** Requirements for qualification include:
**** Having a written plan identifying each unit.
**** Each unit determining its own net position for every security.
**** Traders being assigned to only one unit.
**** Traders from one unit not coordinating with traders in another unit.
** Impact of Independent Unit Aggregation
*** If a broker-dealer qualifies, a unit can have a net short position in a security even if the firm is net long on that security.
@endmindmap
