In February, the NYSE petitioned the SEC to amend the beneficial ownership reporting rules under Section 13(f) of the Securities Exchange Act of 1934. Under the proposed amendment to Rule 13f-1, institutional investment managers, including investment advisers to private accounts, mutual funds or pension plan assets, would be required to report their holdings within two days of a calendar quarter end rather than the current 45 days.
The NYSE argues that the shorter reporting period would improve market transparency because institutional managers would no longer be able to rely on the 45-day reporting window to delay reporting significant purchases or sales of securities. According to the NYSE, shortening the reporting window would be consistent with the objectives underlying Section 13(f), including “improv[ing] the body of factual data available and thus facilitat[ing] consideration of the influence and impact of institutional investment managers on the securities markets and the public policy implications of that influence.”
Some commenters, including trade groups and institutional asset managers, have opposed the proposed rulemaking on the grounds that reducing the reporting time frame would increase the ability of speculators to exploit the information contained in Form 13F filings. In particular, they raise concerns about the ability of such investors to “front-run” a fund, particularly one with high levels of concentration or that holds a large number of thinly traded securities, and to benefit from institutional investors’ research without compensating the managers for that research.
The Commission has not yet taken action on the petition.