Law Firm's 13F Filing: What You Need To Know

The Securities and Exchange Commission's (SEC) Form 13F is a quarterly report that must be filed by all institutional investment managers with at least $100 million in assets under management. This includes law firms that meet the definition of an institutional investment manager. The form discloses their equity holdings and can provide insights into the market. Managers are required to file Form 13F within 45 days after the last day of the calendar quarter.

Law firms that need to file a 13F

The Securities and Exchange Commission's (SEC) Form 13F is a quarterly report that must be filed by all institutional investment managers with at least $100 million in assets under management. This includes law firms that meet the definition of an "institutional investment manager" and have discretion over the accounts of any other person or entity.

Section 13(f) of the Securities Exchange Act requires an institutional investment manager firm to file a Form 13F if the firm exercises investment discretion with respect to $100 million or more in certain identified 13F securities. These 13F securities include equity securities traded on an exchange (including the Nasdaq National Market System), certain equity options and warrants, shares of closed-end investment companies, and certain convertible debt securities.

Law firms that act as investment advisers or managers, managing private accounts, mutual fund assets, or pension plan assets, would fall under the category of institutional investment managers and would be required to file Form 13F if they meet the $100 million threshold. The first Form 13F filing is due 45 days after the end of the calendar year in which the $100 million threshold was reached. For example, if a law firm reaches the $100 million threshold on June 30, 2018, its first Form 13F filing would be due by February 14, 2019.

It is important to note that Form 13F filings must be done using the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system, and the filings are made public. The information disclosed in Form 13F provides insights into the holdings of large institutional investors, and smaller investors often use this information to guide their own investment strategies. Therefore, law firms that meet the criteria for filing Form 13F should ensure compliance with the SEC's requirements to avoid penalties and maintain transparency in their investment activities.

The 13F filing threshold

The 13F filing provides transparency into the financial holdings of large managers and their investment strategies. It also gives insights to smaller investors about what the "smart money" is doing in the market. However, there are criticisms of the form, including that it only requires fund managers to file reports 45 days after the end of each quarter, which can lead to issues with the reliability and timeliness of the data. Additionally, funds are only required to report long positions, which can give an incomplete or misleading picture of their investment strategies.

Despite these criticisms, the 13F filing remains an important tool for investors and regulators alike, providing valuable insights into the investment activities of large institutional investors.

13F reporting and disclosure

The Securities and Exchange Commission's (SEC) Form 13F is a quarterly report that must be filed by all institutional investment managers with at least $100 million in assets under management. This includes entities such as mutual funds, hedge funds, trust companies, pension funds, insurance companies, and registered investment advisors. The purpose of Form 13F is to increase public information regarding securities holdings, thereby improving investor confidence in the integrity of the US securities markets. Additionally, the information disclosed in Form 13F provides transparency for regulators to monitor security market controls and design effective policies.

Form 13F must be filed within 45 days after the last day of the calendar quarter, and it should include all equity assets under management. This includes US-listed equity securities, exchange-traded funds (ETFs), equity options, warrants, shares of closed-end investment companies, and certain convertible debt securities. However, one issue with 13F filings is that funds are only required to report long positions, along with their put and call options, American Depositary Receipts (ADRs), and convertible notes. This can result in an incomplete or misleading picture, as some funds primarily generate returns from short-selling, using long positions as hedges.

To address this concern, the New York Stock Exchange and the National Investor Relations Institute petitioned the SEC in 2015 to require the disclosure of short positions on Form 13F. Additionally, groups have urged the SEC to increase the frequency of Form 13F reporting and expand the range of financial products that must be disclosed. These calls for enhanced transparency aim to mitigate the risk of crowded trades and overvalued stocks, which can occur when money managers borrow investment ideas from one another.

It is important to note that the list of Section 13(f) securities is extensive and may include securities commonly used by advisory firms. As such, the Chief Compliance Officer of advisory firms should regularly review whether the firm is required to file Form 13F, even if they do not meet the $100 million threshold. By complying with Form 13F requirements, institutional investment managers contribute to increased transparency and investor confidence in the US financial markets.

13F filing deadlines

The 13F filing deadline is a requirement by the Securities and Exchange Commission (SEC) that was created in 1975 by Congress. It is a quarterly report that must be filed by all institutional investment managers with at least $100 million in assets under management. The report discloses their equity holdings and can provide insights into the market.

The 13F filing deadline is typically 45 days after the last day of the calendar quarter. For example, if an RIA firm first reaches the $100 million threshold on June 30, 2018, its first Form 13F filing should be filed by February 14, 2019 (45 days after the last day of the calendar year). However, there has been pressure to reduce the deadline for 13F filings to increase the timeliness of the data. The Society for Corporate Governance, NIRI, and the NYSE have petitioned the SEC to reduce the deadline to no more than 5 business days after the end of each quarter.

The 13F filing deadline is an important tool for smaller investors to understand the holdings of large institutional investors and guide their investment strategies. It also provides transparency and helps monitor security market controls. However, critics have argued that the current disclosure regime means the information is often out of date by the time it is made public.

Additionally, it is important to note that funds are only required to report long positions, which can give an incomplete or misleading picture of their investment activities. Despite the push for shorter deadlines, the SEC proposed a change in 2020 that would have removed thousands of investors from the requirement to reveal their holdings, but this plan was dropped after widespread opposition. If a filing due date falls on a weekend or SEC holiday, the filing is due on the following business day.

13F filing requirements

Form 13F is a quarterly report that must be filed by all institutional investment managers with at least $100 million in assets under management. It discloses their equity holdings and can provide insights into the investment strategies of the nation's biggest investors.

Form 13F must be filed within 45 days after the last day of the calendar quarter. Most funds wait until the end of this period to conceal their investment strategy from competitors and the public. The form must be filed using the SEC's Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. A paper copy may be filed only if a hardship exemption is granted by the SEC.

The form must include a cover page, a summary page, and an information table in XML format. It requires the disclosure of the name of the institutional investment manager that files the report, and, with respect to each section 13(f) security over which it exercises investment discretion, the name and class, the CUSIP number, the number of shares as of the end of the calendar quarter for which the report is filed, and the total market value.

Section 13(f) securities generally include equity securities that trade on an exchange (including the Nasdaq National Market System), certain equity options and warrants, shares of closed-end investment companies, and certain convertible debt securities. The shares of open-end investment companies (i.e., mutual funds) are not Section 13(f) securities.

In 2022, the SEC announced a new 13F rule that requires filers to round security holding values to the nearest dollar rather than the nearest thousandth of a dollar. It also adds the option to use a FIGI (Financial Instrument Global Identifier) for a reported security in addition to, but not instead of, its CUSIP number.

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