Sep. 29, 2020
Comments of P. Galva on S7-08-20 September 29, 2020 I am strongly opposed to this rule change because (1) it would significantly harm a broad set of market participants, (2) any modest benefits to a small set of stakeholders would be more than offset by substantial costs to other stakeholders, and (3) the SEC lacks the authority to enact the proposed rule change: 1. Proposal drastically reduces market transparency for all stakeholders (e.g., investors, companies, market intermediaries, academics, government / regulators) and erodes the benefits they derive from the transparency since there is no viable alternative source for the information contained in 13F filings. I believe the value of this market transparency is enormous which is supported by the unprecedented and broad based opposition to the proposed rule change presented in the comments submitted to the SEC 2. Proposal would not achieve savings because the process to file 13Fs is largely automated and any savings achieved would be offset by substantial costs incurred by other stakeholders in an attempt to partially recreate the information contained in 13Fs (e.g., investor relations professionals paying service providers to identify their shareholders). Additionally, the concerns around front-running or stealing a 13F filer's intellectual property are not valid due to (1) the substantial reporting time lag of between 45 and 135 days after trade activity occurs, (2) the lack of any analysis or evidence to support this concern, and (3) the substantial opposition to this proposed rule change from the investment management community 3. Proposal violates the 13F provision which gives the SEC the right to lower the reporting threshold but not to raise it. If the SEC were to use its exemptive authority that would violate the spirit of the provision the SEC is meant to uphold and would contradict the legislative history surrounding this rule, most notably the 1975 Senate Banking Committee bill requiring the SEC set the reporting threshold at "at least $100,000,000 or such lesser amount" as noted by Alexander I. Platt in an article in the Yale Journal on Regulation