diff --git a/packages/specfact-code-review/module-package.yaml b/packages/specfact-code-review/module-package.yaml
index 85ae462..68caac3 100644
--- a/packages/specfact-code-review/module-package.yaml
+++ b/packages/specfact-code-review/module-package.yaml
@@ -1,5 +1,5 @@
 name: nold-ai/specfact-code-review
-version: 0.46.1
+version: 0.46.4
 commands:
   - code
 tier: official
@@ -23,5 +23,5 @@ description: Official SpecFact code review bundle package.
 category: codebase
 bundle_group_command: code
 integrity:
-  checksum: sha256:13a5a27fc13e2db6d36573b42482a1fe9d294e100738f6150ad0468868581dd1
-  signature: ulRchbUE1q1JhCuTRUPUolICZMiWDBCQgNmNt4YNbtyRysXMhiIcge/KJ1X1VqKtzWu4lzvEDf0OInPJ2lRxBA==
+  checksum: sha256:ee7d224ac2a7894cc67d3e052764137b034e089624d5007989cab818839e5449
+  signature: V+GNklTfgmdYKDWgp53SDw4s1R5GE1UF/745CVnXFJ0v3WSCWLY8APqyuabetBU6/Z1UQ1lKfEiRiZOFJw7WBg==
diff --git a/packages/specfact-code-review/src/specfact_code_review/run/runner.py b/packages/specfact-code-review/src/specfact_code_review/run/runner.py
index 4ccd86f..53426cc 100644
--- a/packages/specfact-code-review/src/specfact_code_review/run/runner.py
+++ b/packages/specfact-code-review/src/specfact_code_review/run/runner.py
@@ -301,6 +301,23 @@ def _is_empty_init_file(source_file: Path) -> bool:
     return stripped_content in ("", "pass")
 
 
+def _is_coverage_omitted_init_by_project_policy(source_file: Path) -> bool:
+    """True when repo coverage omits this file (``pyproject.toml`` ``[tool.coverage.run]`` ``omit``).
+
+    ``src/**/__init__.py`` and ``packages/**/__init__.py`` are omitted from coverage; the pytest-cov
+    JSON report therefore has no ``percent_covered`` for them — not a TDD gap.
+    """
+    try:
+        path = source_file if source_file.is_absolute() else (Path.cwd() / source_file).resolve()
+        rel = path.relative_to(Path.cwd().resolve())
+    except (ValueError, OSError):
+        rel = source_file
+    if rel.name != "__init__.py":
+        return False
+    parts = rel.parts
+    return len(parts) >= 2 and parts[0] in ("src", "packages")
+
+
 def _coverage_findings(
     source_files: list[Path],
     coverage_payload: dict[str, object],
@@ -312,6 +329,8 @@ def _coverage_findings(
         if percent_covered is None:
             if source_file.name == "__init__.py" and _is_empty_init_file(source_file):
                 continue  # Exempt empty __init__.py files
+            if _is_coverage_omitted_init_by_project_policy(source_file):
+                continue
             return [
                 tool_error(
                     tool="pytest",
diff --git a/packages/specfact-code-review/src/specfact_code_review/tools/__init__.py b/packages/specfact-code-review/src/specfact_code_review/tools/__init__.py
index 85e7b19..6911d4c 100644
--- a/packages/specfact-code-review/src/specfact_code_review/tools/__init__.py
+++ b/packages/specfact-code-review/src/specfact_code_review/tools/__init__.py
@@ -6,10 +6,11 @@
 from specfact_code_review.tools.pylint_runner import run_pylint
 from specfact_code_review.tools.radon_runner import run_radon
 from specfact_code_review.tools.ruff_runner import run_ruff
-from specfact_code_review.tools.semgrep_runner import run_semgrep
+from specfact_code_review.tools.semgrep_runner import find_semgrep_config, run_semgrep
 
 
 __all__ = [
+    "find_semgrep_config",
     "run_ast_clean_code",
     "run_basedpyright",
     "run_contract_check",
diff --git a/packages/specfact-code-review/src/specfact_code_review/tools/semgrep_runner.py b/packages/specfact-code-review/src/specfact_code_review/tools/semgrep_runner.py
index 0fc7f2a..7118cd7 100644
--- a/packages/specfact-code-review/src/specfact_code_review/tools/semgrep_runner.py
+++ b/packages/specfact-code-review/src/specfact_code_review/tools/semgrep_runner.py
@@ -26,6 +26,8 @@
 }
 SEMGREP_TIMEOUT_SECONDS = 90
 SEMGREP_RETRY_ATTEMPTS = 2
+_SEMGREP_STDERR_SNIP_MAX = 4000
+_MAX_CONFIG_PARENT_WALK = 32
 SemgrepCategory = Literal["clean_code", "architecture", "naming"]
 
 
@@ -73,15 +75,53 @@ def _normalize_rule_id(rule: str) -> str:
     return rule
 
 
-def _resolve_config_path() -> Path:
-    package_root = Path(__file__).resolve().parents[3]
-    config_path = package_root / ".semgrep" / "clean_code.yaml"
-    if config_path.exists():
-        return config_path
-    raise FileNotFoundError(f"Semgrep config not found at {config_path}")
+def _is_bundle_boundary(directory: Path) -> bool:
+    """True when ``directory`` is a sensible workspace root (do not search parents above it)."""
+    return (directory / ".git").exists() or (directory / "module-package.yaml").is_file()
 
 
-def _run_semgrep_command(files: list[Path]) -> subprocess.CompletedProcess[str]:
+@beartype
+@require(lambda bundle_root, module_file: bundle_root is None or isinstance(bundle_root, Path))
+@require(lambda bundle_root, module_file: module_file is None or isinstance(module_file, Path))
+@ensure(lambda result: isinstance(result, Path), "result must be a Path")
+def find_semgrep_config(
+    *,
+    bundle_root: Path | None = None,
+    module_file: Path | None = None,
+) -> Path:
+    """Locate ``.semgrep/clean_code.yaml`` for this package or an explicit bundle root.
+
+    When ``bundle_root`` is set, only ``bundle_root/.semgrep/clean_code.yaml`` is considered.
+
+    Otherwise walk parents of ``module_file`` (default: this module), checking each directory for
+    ``.semgrep/clean_code.yaml``. Stop ascending when a bundle boundary is hit (``.git`` or
+    ``module-package.yaml``) so unrelated trees (e.g. a stray ``~/.semgrep``) are never used.
+    """
+    if bundle_root is not None:
+        br = bundle_root.resolve()
+        candidate = br / ".semgrep" / "clean_code.yaml"
+        if candidate.is_file():
+            return candidate
+        raise FileNotFoundError(f"Semgrep config not found at {candidate} (bundle_root={br})")
+
+    here = (module_file if module_file is not None else Path(__file__)).resolve()
+    for depth, parent in enumerate([here.parent, *here.parents]):
+        if depth > _MAX_CONFIG_PARENT_WALK:
+            break
+        if parent == parent.parent:
+            break
+        candidate = parent / ".semgrep" / "clean_code.yaml"
+        if candidate.is_file():
+            return candidate
+        if _is_bundle_boundary(parent):
+            break
+        # Installed wheels live under site-packages; do not walk into lib/, $HOME, or other trees.
+        if parent.name == "site-packages":
+            break
+    raise FileNotFoundError(f"Semgrep config not found (no .semgrep/clean_code.yaml under bundle for {here})")
+
+
+def _run_semgrep_command(files: list[Path], *, bundle_root: Path | None) -> subprocess.CompletedProcess[str]:
     with tempfile.TemporaryDirectory(prefix="semgrep-home-") as temp_home:
         semgrep_home = Path(temp_home)
         semgrep_log_dir = semgrep_home / ".semgrep"
@@ -96,8 +136,9 @@ def _run_semgrep_command(files: list[Path]) -> subprocess.CompletedProcess[str]:
             [
                 "semgrep",
                 "--disable-version-check",
+                "--quiet",
                 "--config",
-                str(_resolve_config_path()),
+                str(find_semgrep_config(bundle_root=bundle_root)),
                 "--json",
                 *(str(file_path) for file_path in files),
             ],
@@ -109,12 +150,24 @@ def _run_semgrep_command(files: list[Path]) -> subprocess.CompletedProcess[str]:
         )
 
 
-def _load_semgrep_results(files: list[Path]) -> list[object]:
+def _snip_stderr_tail(stderr: str) -> str:
+    """Keep the last ``_SEMGREP_STDERR_SNIP_MAX`` chars so the most recent diagnostics stay visible."""
+    err_raw = stderr.strip()
+    if len(err_raw) <= _SEMGREP_STDERR_SNIP_MAX:
+        return err_raw
+    return "…" + err_raw[-_SEMGREP_STDERR_SNIP_MAX:]
+
+
+def _load_semgrep_results(files: list[Path], *, bundle_root: Path | None) -> list[object]:
     last_error: Exception | None = None
     for _attempt in range(SEMGREP_RETRY_ATTEMPTS):
         try:
-            result = _run_semgrep_command(files)
-            return _parse_semgrep_results(json.loads(result.stdout))
+            result = _run_semgrep_command(files, bundle_root=bundle_root)
+            raw_out = result.stdout.strip()
+            if not raw_out:
+                err_tail = _snip_stderr_tail(result.stderr or "")
+                raise ValueError(f"semgrep returned empty stdout (returncode={result.returncode}); stderr={err_tail!r}")
+            return _parse_semgrep_results(json.loads(raw_out))
         except (FileNotFoundError, OSError, ValueError, json.JSONDecodeError, subprocess.TimeoutExpired) as exc:
             last_error = exc
     if last_error is None:
@@ -189,13 +242,20 @@ def _finding_from_result(item: dict[str, object], *, allowed_paths: set[str]) ->
     lambda result: all(isinstance(finding, ReviewFinding) for finding in result),
     "result must contain ReviewFinding instances",
 )
-def run_semgrep(files: list[Path]) -> list[ReviewFinding]:
-    """Run Semgrep for the provided files and map findings into ReviewFinding records."""
+def run_semgrep(files: list[Path], *, bundle_root: Path | None = None) -> list[ReviewFinding]:
+    """Run Semgrep for the provided files and map findings into ReviewFinding records.
+
+    Args:
+        files: Paths to scan.
+        bundle_root: Optional directory that contains ``.semgrep/clean_code.yaml`` (e.g. extracted
+            bundle root). When omitted, config is resolved from this package upward until a bundle
+            boundary (``.git`` or ``module-package.yaml``).
+    """
     if not files:
         return []
 
     try:
-        raw_results = _load_semgrep_results(files)
+        raw_results = _load_semgrep_results(files, bundle_root=bundle_root)
     except (FileNotFoundError, OSError, ValueError, json.JSONDecodeError, subprocess.TimeoutExpired) as exc:
         return _tool_error(files[0], f"Unable to parse Semgrep output: {exc}")
 
diff --git a/registry/index.json b/registry/index.json
index 54459f6..935d33a 100644
--- a/registry/index.json
+++ b/registry/index.json
@@ -78,9 +78,9 @@
     },
     {
       "id": "nold-ai/specfact-code-review",
-      "latest_version": "0.46.1",
-      "download_url": "modules/specfact-code-review-0.46.1.tar.gz",
-      "checksum_sha256": "cbd954a055dfa83bab76880350f3bdc5652046ed4527d0c0ff0d1550e51be1af",
+      "latest_version": "0.46.4",
+      "download_url": "modules/specfact-code-review-0.46.4.tar.gz",
+      "checksum_sha256": "caecd26d6e6308ed88047385e0a9579c5336665d46e8118c3ae9caf4cbd786c8",
       "core_compatibility": ">=0.44.0,<1.0.0",
       "tier": "official",
       "publisher": {
diff --git a/registry/modules/specfact-code-review-0.46.3.tar.gz b/registry/modules/specfact-code-review-0.46.3.tar.gz
new file mode 100644
index 0000000..db33048
Binary files /dev/null and b/registry/modules/specfact-code-review-0.46.3.tar.gz differ
diff --git a/registry/modules/specfact-code-review-0.46.3.tar.gz.sha256 b/registry/modules/specfact-code-review-0.46.3.tar.gz.sha256
new file mode 100644
index 0000000..b9a4deb
--- /dev/null
+++ b/registry/modules/specfact-code-review-0.46.3.tar.gz.sha256
@@ -0,0 +1 @@
+58f3f9b01a13247b8109f856cb96abfd955e21a70ffafa37ceebf587d402888e
diff --git a/registry/modules/specfact-code-review-0.46.4.tar.gz b/registry/modules/specfact-code-review-0.46.4.tar.gz
new file mode 100644
index 0000000..49d7f37
Binary files /dev/null and b/registry/modules/specfact-code-review-0.46.4.tar.gz differ
diff --git a/registry/modules/specfact-code-review-0.46.4.tar.gz.sha256 b/registry/modules/specfact-code-review-0.46.4.tar.gz.sha256
new file mode 100644
index 0000000..fc9c6fe
--- /dev/null
+++ b/registry/modules/specfact-code-review-0.46.4.tar.gz.sha256
@@ -0,0 +1 @@
+caecd26d6e6308ed88047385e0a9579c5336665d46e8118c3ae9caf4cbd786c8
diff --git a/registry/signatures/specfact-code-review-0.46.3.tar.sig b/registry/signatures/specfact-code-review-0.46.3.tar.sig
new file mode 100644
index 0000000..a5c1461
--- /dev/null
+++ b/registry/signatures/specfact-code-review-0.46.3.tar.sig
@@ -0,0 +1 @@
+qAX9yIBO+UBsqa4ODAym4YrtWlGhSoyiIb4b/UUWKKN+vv8yNentvwR8mHd32I7BnF+TBiHHmonH+ktPV9XSCQ==
diff --git a/registry/signatures/specfact-code-review-0.46.4.tar.sig b/registry/signatures/specfact-code-review-0.46.4.tar.sig
new file mode 100644
index 0000000..5d58a76
--- /dev/null
+++ b/registry/signatures/specfact-code-review-0.46.4.tar.sig
@@ -0,0 +1 @@
+V+GNklTfgmdYKDWgp53SDw4s1R5GE1UF/745CVnXFJ0v3WSCWLY8APqyuabetBU6/Z1UQ1lKfEiRiZOFJw7WBg==
diff --git a/tests/unit/specfact_code_review/run/test_runner.py b/tests/unit/specfact_code_review/run/test_runner.py
index 01df32e..2bb18fb 100644
--- a/tests/unit/specfact_code_review/run/test_runner.py
+++ b/tests/unit/specfact_code_review/run/test_runner.py
@@ -471,15 +471,14 @@ def test_coverage_findings_skips_package_initializers_without_coverage_data() ->
     assert coverage_by_source == {}
 
 
-def test_coverage_findings_does_not_skip_non_empty_package_initializers() -> None:
+def test_coverage_findings_skips_package_initializers_omitted_from_coverage_reports() -> None:
+    """``packages/**/__init__.py`` is omitted in coverage config; JSON has no per-file summary."""
     source_file = Path("packages/specfact-code-review/src/specfact_code_review/tools/__init__.py")
 
     findings, coverage_by_source = _coverage_findings([source_file], {"files": {}})
 
-    assert len(findings) == 1
-    assert findings[0].category == "tool_error"
-    assert "Coverage data missing" in findings[0].message
-    assert coverage_by_source is None
+    assert not findings
+    assert coverage_by_source == {}
 
 
 def test_run_pytest_with_coverage_disables_global_fail_under(monkeypatch: MonkeyPatch) -> None:
diff --git a/tests/unit/specfact_code_review/tools/test_semgrep_runner.py b/tests/unit/specfact_code_review/tools/test_semgrep_runner.py
index 9a0ef29..93156c2 100644
--- a/tests/unit/specfact_code_review/tools/test_semgrep_runner.py
+++ b/tests/unit/specfact_code_review/tools/test_semgrep_runner.py
@@ -9,7 +9,7 @@
 import pytest
 from pytest import MonkeyPatch
 
-from specfact_code_review.tools.semgrep_runner import run_semgrep
+from specfact_code_review.tools.semgrep_runner import _snip_stderr_tail, find_semgrep_config, run_semgrep
 from tests.unit.specfact_code_review.tools.helpers import completed_process
 
 
@@ -177,6 +177,35 @@ def test_run_semgrep_ignores_unsupported_rules(tmp_path: Path, monkeypatch: Monk
     assert not findings
 
 
+def test_find_semgrep_config_with_explicit_bundle_root(tmp_path: Path) -> None:
+    root = tmp_path / "bundle"
+    (root / ".semgrep").mkdir(parents=True)
+    (root / ".semgrep" / "clean_code.yaml").write_text("rules: []\n", encoding="utf-8")
+    assert find_semgrep_config(bundle_root=root) == root / ".semgrep" / "clean_code.yaml"
+
+
+def test_snip_stderr_tail_keeps_last_chars() -> None:
+    """Long stderr should retain the suffix (most recent diagnostics), not the prefix."""
+    long = "UNIQUE_HEAD_MARKER" + ("A" * 5000) + "END_OF_ERROR"
+    out = _snip_stderr_tail(long)
+    assert "END_OF_ERROR" in out
+    assert out.startswith("…")
+    assert "UNIQUE_HEAD_MARKER" not in out
+
+
+def test_find_semgrep_config_stops_at_git_directory(tmp_path: Path) -> None:
+    """Do not resolve a config outside the repo (e.g. stray ~/.semgrep)."""
+    repo = tmp_path / "repo"
+    (repo / ".git").mkdir(parents=True)
+    nested = repo / "nested" / "pkg" / "tools"
+    nested.mkdir(parents=True)
+    (repo / "nested" / ".semgrep").mkdir(parents=True)
+    (repo / "nested" / ".semgrep" / "clean_code.yaml").write_text("rules: []\n", encoding="utf-8")
+    fake_here = nested / "runner.py"
+    fake_here.write_text("#", encoding="utf-8")
+    assert find_semgrep_config(module_file=fake_here) == repo / "nested" / ".semgrep" / "clean_code.yaml"
+
+
 def test_run_semgrep_retries_after_transient_parse_failure(tmp_path: Path, monkeypatch: MonkeyPatch) -> None:
     file_path = tmp_path / "target.py"
     payload = {