Last Friday (14th August) was the Q2 filing deadline for 13F reporting. But how many more filings will you have to make?
Last month, the SEC announced proposed amendments to 13F Reporting, to update the reporting threshold for institutional investment managers, as well as a number of other ancillary changes. Below we detail some of these amendments.
New Reporting Threshold
Institutional Investment Managers are currently required to file Form 13F on a quarterly basis if the Manager exercises investment discretion over $100 million or more in Section 13(f) securities.
The proposal would raise the reporting threshold to $3.5 billion. The rationale behind the increase is that $3.5 billion is proportionally the same market value of U.S. equities that $100 million represented in 1975, when the requirement was enacted.
It is believed that the proposed adjusted threshold would provide relief to smaller managers, who are now subject to Form 13F reporting, while retaining data on over 90% of the dollar value of the securities currently reported.
The SEC also proposed that, going forward, it will review the Form 13F reporting threshold every five years and recommend appropriate adjustments, if required.
In addition to the threshold change, the SEC proposed the below additional changes.
Removal of the Omission Threshold for Individual Securities
Currently, if an Institutional Investment Manager’s position in a security meets two specific requirements, they do not have to list certain small positions of Section 13(f) securities on their Form 13F:
- Firstly, they must hold fewer than 10,000 shares of a given issuer; and
- Secondly, the aggregate fair market value of their holdings in that same issuer must be less than $200,000.
If both of these requirements are met, the securities can be omitted from the filing.
Under the proposed amendment, the ability of managers to omit certain small positions would be eliminated. This would increase the overall holding’s information required from larger managers.
Section 13(f)(4) states that the Commission may prevent or delay public disclosure of Form 13F information for public interest reasons or the protection of investors.
The proposals amend the instructions relating to requests for confidential treatment of Form 13F information. The amendment requires managers seeking confidential treatment for information contained in Form 13F to demonstrate that the information is both customarily and actually kept private by the manager, and to show how the release of this information could cause harm to the manager.
Additional Numerical Identifiers
The proposal would also require managers to report additional numerical identifiers to enhance the usability of the information provided on the form. The proposed amendments would require each Form 13F filer to provide its CRD number and SEC filing number.