On July 10, 2020, the United States Securities and Exchange Commission proposed amendments to Form 13F reporting. The changes would affect the filing threshold for institutional advisers and several other requirements. Because the filing requirements have not been updated since adoption of the original rule in the 1970s, the changes aim to reduce unnecessary compliance burdens on smaller firms.
Below are key takeaways from the proposed amendments:
- Changes to reporting threshold- The cumulative value of United States public corporate equites has risen from $1.1 trillion at the time Form 13F was adopted to nearly $36 trillion today. Proportionate to this significant increase, the SEC proposes a change in the filing threshold from $100 million to $3.5 billion in reportable securities under management.
- Benefits to smaller advisers- The proposed amendments would relieve 90% of currently required advisers from filing, while retaining disclosure for nearly 90% of the presently reported securities. The estimated savings for smaller managers no longer filing Form 13F could amount to $136 million in filing fees and other associated costs.
- Additional proposed amendments- Under the changes, SEC staff would be required to review and adjust 13F filing requirements every five years to remain in congruence with market shifts. Advisers would no longer be able to omit certain small positions and would be required to report additional numerical identifiers.
WHAT DOES THIS MEAN FOR ME?
The proposed amendments have entered a 60 day public comment period and the SEC welcomes input on the provisions. If your firm manages $100 million or more in certain reportable equity securities, quarterly 13F filings will continue to be required until further notice.
Fairview will keep you updated on the status of the proposed amendments. In the meantime, if your firm needs assistance filing Form 13F or completing other SEC compliance requirements, contact us to learn more about our services.