Yes. "
Short Exempt" doesn't mean what they wrote on that website.
Unresolved question is: "
Exempt" from what? As you surmise, it's obviously not an exemption from the "Uptick Rule" or there would be only zeros reported on days when the
uptick rule isn't in place.
So what other "
Exemptions" are there? Well, SEC Regulation SHO is itself a narrow exemption to the prohibition against short selling granted only to Options Market Makers.
Assumed basis of your question:
There is harm or some reason to not label trades that would be SE in an uptick rule condition as SE when uptick is not active.
So what is that reason? I don't see anything "obviously" wrong about labeling data with appropriate attributes.
An object can have a classification added even if that classification is superfluous or not needed at the time. A trade that would be exempt from the uptick rule still has that characteristic even if the uptick rule is not in place.
Further, it is in the best interests of all parties involved (at least from the standpoint of recordkeeping) to mark relevent trades with the least restrictive category possible in the event the limiting event does happen.
Labeling trades SE that qualify, even if that qualifcation is not needed, simplies the processing. When the SE is needed, it's there. When not needed, its not checked. Otherwise, you are adding an additional layer of logic that serves no purpose:
Simple:
Would this trade be considered short exempt?
Yes -> tag as short exempt
Complicated:
Would this trade be considered short exempt?
Yes -> Are we currently under an uptick rule?
Yes -> label SE
But this is not good enough, you really need:
No -> is the uptick rule active or likely to be in place soon?
Yes -> label SE
Where 'likely' and 'soon' are arbitrary, and if they get the values wrong, it could go badly for them because the trades cannot be properly classified without back editing. Simpler and safer to just tag all that qualify.