August 26, 2020
While I agree with the premise that the $100 million threshold should be adjusted in some manner from the level set in 1975, I disagree with the methodology and proposal as it is currently written. Adjusting the reporting threshold solely based on increases in market size ignores and does not account for the increasing ownership of the market by institutional investors. If one of the goals of the 13(f) disclosure program is to "facilitate consideration of the influence and impact of institutional investment managers on the securities markets and the public policy implications of that influence.", then some compensating factor which would lower the disclosure threshold from $3.5 billion should be included.
If the intent of the proposed change is to lessen the burden of compliance on small managers, another reasonable methodology that accounts for the public's right to this information is to compare the marginal gain to institutional investors and marginal loss of information to individual investors by raising the threshold. According to Table 1 of the proposal, by tripling the reporting threshold to $300 million, the number of required filers would decrease by half. It would take increasing the threshold to $1 billion to reduce the number of filers by 75%. A proposal that minimized the number of filers, while maximizing the information available to the public would have been more reasonable than the current one.