SEC Proposes Amendments to Update Institutional Investment Manager Reporting

Amendments Would Eliminate Requirements for 90% of Smaller Managers

On July 10, 2020, the Securities and Exchange Commission proposed amendments to Form 13F to update the reporting threshold for institutional investment managers and make other “targeted changes.” The SEC adopted Form 13F over 40 years ago for the purpose of requiring institutional investment managers having investment discretion over $100 million or more in publicly-held equity securities to disclose their investment activities and holdings. The SEC’s proposed amendments would increase the reporting threshold to $3.5 billion. According to the SEC’s release, the new threshold would retain disclosure of over 90% of the dollar value of the holdings data currently reported. However, it would eliminate the Form 13F filing requirement and its attendant costs for the nearly 90% of filers that are smaller managers. As a result, it is estimated that 4,500 investment managers overseeing $2.3 trillion in assets would no longer have to provide the current disclosure.

The proposal also would direct SEC staff to review the Form 13F reporting threshold every five years and would eliminate the ability of managers to omit certain small positions, thereby increasing the overall holdings information required from larger managers.

SEC Commissioner Allison Lee, the National Investor Relations Institute and others believe that the proposal decreases transparency and lacks sufficient analysis. We anticipate the SEC will receive many comment letters before the comment period ends which will be 60 days after publication of the proposed rules in the Federal Register.

Should you have any questions or need assistance, please contact us.

James C. Kennedy

F. Mark Reuter

Allison A. Westfall

Christopher S. Brinkman

Brett S. Niehauser

KMK Law articles and blog posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. The laws/regulations and interpretations thereof are evolving and subject to change. Although we will attempt to update articles/blog posts for material changes, the article/post may not reflect changes in laws/regulations or guidance issued after the date the article/post was published. Please consult with counsel of your choice regarding any specific questions you may have.


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