July 13, 2020
I am strongly opposed to the main change proposed in the proposed rule S7-08-20, but several of the smaller proposals are useful.
Regarding the proposed reporting threshold, increasing it by using growth of the equity market or returns is not a valid measure. Much has changed since 1975 and the burden for reporting is much less now that records are kept electronically. Raising this threshold would negatively impact the utility of Form 13(f) data. Personally speaking, it would reduce my confidence in the Security and Exchange Commission, which is additionally held in high esteem worldwide. It appears this rule would throw transparency and oversight - the whole purpose of the SEC - out the window. I do not believe the obligations of 13F requirements are more burdensome to smaller managers in the technology age. In 1975 this argument was valid, but it is not 45 years ago. Form 13F data is important to many people, from other institutional investors as well as retail investors. For retail investors, the argument that the majority of holdings by dollar is still captured with the increased reporting threshold is not valid. Retail investors who study 13F filings would prefer to use 13F data from large and smaller firms alike. This is the only source of this information and changing this requirement would significantly decrease transparency and the legitimacy of the 13F system.
The proposed removal of the omission threshold is a good move. As is shown in that section, there is little additional burden to produce this data.
I also find the proposed requirement to provide CRD numbers and SEC filing numbers useful and will not add any new burden.
Furthermore, the technical proposal to require rounding to the nearest dollar is a good idea. It does not increase the burden of filing.
In summary, I find that several of the proposals are useful, but the main proposal is problematic - the reporting threshold must stay at $100 million in order to maintain the SEC's mission of protecting investors, maintaining fair, orderly, and efficient markets, and facilitating capital formation. Increasing this threshold is a complete dereliction and conscious negligence of the SEC's Constitutionally-bound duties and could lead to the delegitimization of American markets and the demise of American leadership in the financial sector worldwide. This is not what any of us want to see Maintaining the 13F reporting threshold as currently implemented continues to promote transparency and an efficient financial sector.