On July 10, 2020, the SEC proposed to amend Rule 13F to increase the reporting threshold for institutional investment managers that have discretion over “13F Securities.” The threshold would go from $100 million to $3.5 billion. The move would drastically reduce the number of managers that currently file the Form 13F.
Form 13F was first adopted in 1978 which is when the $100 million threshold was set. In the 42 years since then, the threshold has never been adjusted. The SEC noted that the value of U.S. public corporate equities has gone from $1.1 trillion when the Form was enacted to $35.6 trillion today. As a result, the proportions of the threshold to the market is skewed.
The proposal, if adopted, would result in 4,500 managers no longer having to file Form 13F. Even so, the $3.5 billion threshold would still allow the SEC to retain the disclosure of more than 90% of the dollar amount currently reported. However, the proposal also eliminates the ability to omit smaller holdings and would add more numerical identifiers to enhance the data’s usability.
Finally, the proposal would direct the SEC to review the threshold every five years and potentially build in a consumer price inflation metric. Greyline will continue to follow the proposal and provide updates when finalized.
The full rule proposal can be found here.
