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Congresswoman Waters Opposes Updated 13F Filing Threshold for Institutional Investment Managers

October 7th | 2020



Congresswoman Maxine Waters, the Chairman House of Representative Committee on Financial Services, recently wrote a letter to SEC Chairman Jay Clayton urging the SEC to rescind its proposed amendments to Form 13-F and rule 13f-1 under the Securities and Exchange Act of 1934.


This summer, the SEC proposed to raise the reporting threshold for institutional investment managers from $100 million to $3.5 billion to reflect the change in size and structure of the U.S. equities market since 1975, when Congress adopted the requirement for these managers to file holdings reports with the Commission. The proposal would also direct the SEC staff to conduct reviews of the Form 13F reporting threshold every five years and recommend adjustments if needed.


The proposal also amends Form 13F to increase the information provided by institutional investment managers by eliminating the omission threshold for individual securities and requires managers to provide detailed information that will make the data collected by the form more usable. The proposal also sought comments on potential compliance cost savings for small managers as well as indirect costs of the form, including how other market participants may use the data to copycat or front-run the managers who must file the form.


Ms. Waters is critical of the proposal and believes it would reduce transparency of market information, deprive investors of information about the companies they own and information that they have come to rely upon, and constitutes an improper use of the SEC’s exemptive authority. These criticisms are similar to those of SEC Commissioner Allison Herren Lee.


This proposal has received more than a thousand comments, both for and against, from unknown and well-known industry names. Accordingly, it remains to be seen what adjustments the SEC will make in response to all the comments in its final rulemaking.

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