July 24, 2020
Concerning the contemplated reduction of threshold for 13F Filings of institutional investment managers I would please you to refuse this step. I think there are some points in your proposed rule No. 34-89290 (Reporting Threshold for Institutional Investment Managers) that you should reconsider:
1) You estimate cost savings of $68.1 million to $136 million for investment managers. I think that is a very high estimate because the creation of the 13F Filings (even for small investment managers) is just an very small block of additional costs relative to the other inhouse reportings, which in 2020 is highly automated (which was the case not in 1975). One investment manager from New York (with AUM below $500 million) told me, that for him the time effort and costs for 13F Filing is indeed just a small side effort of his regular monthly reporting for customers.
2) The corresponding loss of transparency should be argument enough to refuse the reduction of the reporting threshold. Here in Germany we see at the example of the Wirecard scandal once more, that regulators should rather tend to increase transparency (not decrease it) to protect investors.
3) You mention indirect costs because of the potential danger for managers to face indirect costs because of copycatting. That logic doesnt make sense for smaller investment managers but rather for large institutions, which have to split the transaction over several days or weeks (over the last calendar day of a quarter): Theoretical a institution which is very large (and very popular, so that copycatting would be rather likely) could have an theoretical disadvantage because copycatters who follow them, could raise a share price with their additional demand, so it would be more difficult for a large institution to handle a multi-week or multi-week order flow at lower prices. But for smaller investment managers this logic doesnt make sense.
I hope you think about it once again and refuse the reduction of the 13F threshold.