Threshold List

Threshold List

A list of securities for which a significant number of shares fails to deliver after five days. A security is placed on the list if 10,000 shares fail to deliver, if more than 0.5% of shares outstanding fail, or if a self-regulatory organization declares it a threshold security. The list is maintained by the National Securities Clearing Corporation. See also: Regulation SHO.
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That list is known as the Regulation SHO Threshold List. According to SEC chairman Christopher Cox, The need for Regulation SHO grew out of long-standing and growing problems with failures to deliver stock by the end of the standard three-day settlement period for trades....
The regulation also allows FTDS that do not remain open long enough for the issuer to appear on the Threshold List.
The regulation clearly states that fails must be closed out after 13 days and even options market makers may not fail in issues with enough FTDS to be on the Threshold List. Regulation SHO also has clear reporting and order marking requirements.
(NFI) Overstock.com (OSTK) 407% 20,536,000 18.50% Vonage (VG) 337% 154,727,000 3.66% Table 3 Threshold List Total number of days on the list, January 2005-January 2008 Days # of Securities 13+ 4164 25+ 2698 50+ 1478 100+ 625 200+ 172 400+ 22 600 4 SOURCE: Buyins.net
According to the SEC, 11,345 securities have "graduated" from Threshold Lists since January 10, 2005, "representing 8.2 billion shares in fails." Public data aggregated from the exchanges reveal that 6,555 unique securities have appeared on Threshold Lists since Regulation SHO was adopted (there are roughly 15,000 total publicly traded equity issues in the United States).

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