A security will be placed on the threshold list if it has a significant fail to deliver position for at least 5 business days. The threshold qualifications are different for SEC reporting issuers and non-SEC reporting issuers (see definitions). Reporting companies are governed by Reg SHO and non-reporting companies are governed by Rule 4320.
As defined in SEC Rule 200 of Regulation SHO, "The term 'short sale' shall mean any sale of a security which the seller does not own or any sale which is consummated by the delivery of a security borrowed by, or for the account of, the seller.">