July 14, 2020
The cost of filing for smaller managers is not significant and a weak rationale for eliminating the requirement to file, particularly in light of the loss of transparency of institutional holdings for investors, allocators, and retail investors. In addition, this rule change would greatly reduce the ability of individual investors ability to manage the fire sale risk of holding positions in over-owned stocks.
In the event of a significant correction the number of reporting managers would be diminished even further. The SP suffered a 56.4% decline during the 2007-2009 financial crisis. A similar event using the most recent quarter as an example, would have reduced the number of funds by another 31% at a time when such data is needed even more.