July 12, 2020
The proposed rule change takes away the only way to monitor if the investment manager is following the intended strategy of the Fund. For example, a small cap value Fund's manager may invest primarily growth stocks thus violating the prospectus and we never know. In addition it provides more transparency on the portfolio managers' actions.The proposed rule makes asset allocation very difficult and gives free hand to the portfolio manager to do whatever he/she wants in the portfolio.
The costs of filing the 13F is miniscule for an individual managers with all the data readily available in IT systems. With the raise of active ETFs who disclose their holdings daily (who are not at all concerned), it difficult to justify any costs such as front running or copy catting from disclosed holdings after 45 days after the end of a quarter.
Our recommendation is to leave the 13F reporting threshold as is at $100 million.