Critics pile on an S.E.C. proposal to limit investor disclosure

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In the weeks since the U.S. Securities and Exchange Commission announced plans to effectively reduce institutional investors’ public disclosure of their holdings, more than 1,500 people have submitted comments to the commission. The overwhelming majority are opposed to the proposal.

A quick recap: On July 10, the commission said it wanted to raise the threshold for filing the 13-F quarterly disclosure form, from $100 million to $3.5 billion. The S.E.C. says this would eliminate about 90 percent of all 13-F filings.

The gist of the public comments — some more colorful than others — is that the change would reduce transparency, going against the commission’s stated mission of protecting investors.

“On what planet is this good for the average investor?” asked one respondent. The timing of the proposal during the pandemic is “particularly vulgar,” wrote another. A supporter of the change noted that companies in other industries aren’t required “to divulge their proprietary strategies.”

Instead of raising the disclosure threshold, some comments suggested shortening the filing window to no more than 30 days after the end of a quarter, instead of the current 45, or requiring funds to disclose all of their investment positions, including short bets. The S.E.C. is under no obligation to act on the public comments.

This is already one of the most-commented-on regulatory issues in the S.E.C.’s history, and responses are being accepted until Sept. 29. The most recent public comments go only through July 28, so there are probably a few thousand more that have yet to be published.

— Michelle Leder, in the DealBook newsletter



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