Sep. 04, 2020
CAUTION: This email originated from outside of the organization. Do not click links or open attachments unless you recognize the sender and know the content is safe. Vanessa A. Countryman Secretary Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 20549-1090 VIA EMAIL RE: Proposal to Raise 13F Filing Threshold, File No. S7-08-20 Dear Ms. Countryman, On behalf of United Natural Foods (ticker “UNFI”), the largest grocery wholesaler in North America, headquartered in Providence, RI and Eden Prairie, MN, I’m writing to offer our comments opposing the proposed plan by the Commission’s division of Investment Management to raise the asset-threshold to $3.5 billion for the 13F filing threshold, which would exempt over 4,000 firms that currently report holdings. UNFI, a publicly traded company with a market cap of approximately $1 billion, relies on quarterly 13F filings to understand UNFI’s shareholder base and changes to that base over time, which inform both our engagement activities with current holders and outreach efforts to attract new holders. Of note, our largest actively managed shareholder would not be required to file under this proposal, nor would 20% of our top 25 holders. We are unique in our capital structure, with our market cap of $1B being very low compared to our total enterprise value and to our annual revenues of approximately $23B. We believe that the SEC’s proposal would result in a significant loss of market transparency to our company and other publicly traded companies in the United States. The proposed rule, if enacted, would impair engagement with shareholders, weaken our ability to attract new investors, adversely impact prudent corporate governance, and deprive us of timely information about potential activism. UNFI is a large, complex public company that relies on timely information from 13F filings to manage our investor base effectively. Increasing the filing threshold will create a complete dearth of information in attempting to navigate changes in our shareholder base – a key to maintaining and growing shareholder value --that will place UNFI at a competitive disadvantage to our broader public company industry peers, such as large retail grocery firms, with larger market caps (and larger investors) who would continue to have complete information. Ultimately, UNFI is driven in our objective to increase shareholder value, and we believe increasing the threshold will be a significant hurdle to our ability to continue to do so effectively. In the spirit of providing full commentary, we suggest the Commission consider 1) shortening the reporting timeframes to no more than 30 days, 2) make it applicable to both short and long positions, and 3) make filing requirements monthly rather than quarterly. We expect that this would place little, if any, burden on investment firms. Under the current proposal, the investment world would have less transparency (not more). The only winners, if you want to think of it that way, would likely be hedge funds and activists while issuers such as UNFI would clearly have lost important insights into its shareholder base. I frankly don’t think that is a result anyone would like to see. Sincerely, Bob Houghton Senior Vice President - Finance United Natural Foods, Inc.