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Goldman Sachs expects rejection of SEC plan to raise 13F reporting threshold

Credit: REUTERS/BRENDAN MCDERMID

A plan by the Securities and Exchange Commission (SEC) to lift the reporting threshold for a minimum of assets under management from $100 million to $3.5 billion has been soundly rejected by the public, according to Goldman Sachs.

By Chuck Mikolajczak

NEW YORK, Oct 19 (Reuters) - A plan by the Securities and Exchange Commission (SEC) to lift the reporting threshold for a minimum of assets under management from $100 million to $3.5 billion has been soundly rejected by the public, according to Goldman Sachs.

A 13F filing is a quarterly report required to be submitted by all institutional investment managers within 45 days of the end of a calendar quarter that discloses their equity holdings.

As the public comment period for the rule has recently ended, Goldman reviewed the 2,262 letters filed with the SEC and found 99% of those to be opposed to the changes, with only 24 in favor.

According to Goldman Sachs, if the new rule were to be adopted the number of hedge funds required to disclose their long stocks positions would be cut by 89%.

However, the firm now expects the proposal to be withdrawn given the stiff opposition, which included submissions by "one of the five SEC Commissioners, the Chair of the House of Representatives Financial Services Committee, the CFA Institute, the Business Roundtable, the Investment Company Institute, NYSE, and Nasdaq, along with many companies."

Goldman said it has used the data disclosed in 13F filings since 2007 to help identify crowded positions along with portfolio and market concentration risk.

Should the proposal be installed, the new threshold would go into effect with positions at year-end, which would require those positions held on Sept. 30 to be filed by Nov. 15.

Goldman noted that in an unusual move, SEC Commissioner Allison Herren Lee released a statement of her own against the proposed change, alongside the public comments.

In a prior note in August, Goldman said the proposed requirement was justified as "the assets covered under the new threshold would reflect proportionally the same market value as $100 million represented in 1975." In addition, the firm said it amounted to regulatory relief related to compliance costs.

(Reporting by Chuck Mikolajczak; Editing by Andrea Ricci)

((charles.mikolajczak@tr.com; @ChuckMik; Reuters Messaging: charles.mikolajczak.thomsonreuters.com@reuters.net))

The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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