July 13, 2020
As a retail investor, I am of the opinion that proposed rule S7-08-20 will have a sizable negative impact on many individuals.
With the advent of free training platforms there are now many more retail investors. There is also a rise of social platforms/influencers posing as sources of investment advice. Unless the SEC can crack down on thousands of questionable scenarios, having a reliable tool (13F filings) that specifies ownership, is the best way to protect investors from being duped by pump and dump schemes.
Currently, 13F filings are delayed by 45 days. This is plenty of time for an institution to build a position. So the "front running" and "copy catting" arguments are moot.
If the reporting threshold is raised significantly (from 100 million to 3.5 billion). Overly competitive investment managers now have an incentive to break up (artificially) into smaller entities to avoid filing a 13F. Filing four times a year can be done for a cost in the thousands. This is not a barrier.
It is not only retail investors that will be negatively impacted, but also accredited investors/ high net worth individuals. As an investment manager can now run a fund in relative obscurity. Forced public reporting holds them accountable.
In conclusion, 13F filings bring transparency of ownership that can be a valuable aid for doing due diligence on a publicly traded company. This protects investors from pump and dump schemes, and allows for informed investment decisions. Creating a position is not inhibited as 45 days is enough of a delay. Institutions will circumvent reporting by breaking into smaller entities. High net worth/accredited investors who invest in said funds will not have the same transparency. Overall market participation will be negatively impacted.
This is my opinion.