Jul. 14, 2020
Hi, I firmly oppose the proposal to raise the required reporting threshold for 13F filings. “In 1978, when Form 13F was adopted, the threshold for filing the form was set at $100 million, the amount in the underlying statute and representing a certain proportionate market value of U.S. equities. Since then, the overall value of U.S. public corporate equities has grown over 30 times (from $1.1 trillion to $35.6 trillion), and the relative significance of managing $100 million has declined considerably.” If the overall value of U.S. public corporate equities has grown over 30 times since 1978, by how much has computer technology refined automation with improved efficiency since then? Filing has become a highly automated process. The value of money might have declined considerably, but I would argue that the growth in automation in the past 40 years counterbalances that depreciation. This proposal lowers transparency in a current backdrop of increased political polarization and in an atmosphere of rising identity politics. The SEC should be pushing for more disclosure and transparency and not rolling back existing rules. It’s all going to come crashing down without fairness in society, said former U.S. Treasury Secretary Lawrence H. Summers in last week’s Wall Street Business week. Transparency breeds trust and fairness. Income inequality in the United States has hit its highest level since the Census Bureau started tracking it more than five decades ago. This proposal will increase inequality even further. Ray Dalio of Bridgewater associates, the world’s largest hedge fund, is comparing current levels of inequality to levels seen right before World War II (see attached). Most funds ask for a minimum capital requirement from investors. The better the money managers, the higher minimum capital requirements, therefore retail investors with smaller amounts of capital don’t have access to quality money managers. The proposed rule change would be a loss for main street investors that look for guidance through the 13F filings. When only the wealthy have access to qualified money managers, the rich get richer and the poor get poorer. “There’s class warfare, all right, but it’s my class, the rich class, that’s making war, and we’re winning.”― Warren Buffett Benjamin Dugas Project Director
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