Blue Sheets: What They Are, How They Work, Failure to Comply

“Blue sheets” are formal information requests sent by the U.S. Securities and Exchange Commission (SEC) to market makers, broker-dealers, and/or clearinghouses. They ask for details tied to specific securities or transactions—especially those potentially linked to price moves—such as trade date and price, transaction size, security name, and involved counterparties, plus account-holder information. The SEC uses them to help determine whether illegal activity, fraud, or insider trading may be involved, and incomplete or inaccurate responses can slow regulators’ ability to spot problems. Blue sheets became electronic in the 1980s through electronic blue sheet systems (EBS), partly to handle high trade volumes. They can trigger deeper investigations requiring additional records and reporting.