August 17, 2020
Contrary to both the original intent of Rule 13(f) and the current market use of 13(f) information, adoption of the SECs current proposal would impede companies and their shareholders from promptly identifying the companys institutional investors, hinder shareholder/public company engagement, and increase the potential for market abuse by sophisticated investors who wish to accumulate shares on a stealth basis. This would be highly disadvantageous for small to mid cap companies in particular.
The SECs proposal flies in the face of the transparency and engagement demanded by investors, asset managers and companies, including the 13(f) rulemaking petition filed in 2013 by NYSE Euronext, the Society of Corporate Secretaries and Governance Professionals and the National Investor Relations Institute, the 13(d) rulemaking petition that Wachtell filed in 2011, and many other calls for change in these reporting rules. The 13(f) petition sought a shortening of the 13(f) reporting deadline from 45 days to two business days after the relevant quarter, as well as monthly rather than quarterly reporting. As noted in the 13(f) petition, the 45-day reporting period—implemented over 35 years ago—was borne of practical considerations that are entirely antiquated in light of the increased sophistication of institutional investors and advances in information technology. The 13(d) rulemaking petition would require prompt disclosure of meaningful stakes, with timing windows and disclosure levels consistent with other major financial markets. Our company opposes adoption of the SECs proposal, and supports proposals that would increase transparency in shareholder ownership, including the long-pending 13(f) and 13(d) rulemaking petitions noted above. Thank you.