On July 10, 2020, the Securities and Exchange Commission (“SEC”) proposed amendments to amend Form 13F to update the reporting threshold for institutional investment managers and certain other changes. This marks the first time that the reporting threshold would be updated since its introduction more than 40 years ago.

Pursuant to Section 13(f) of the Securities Exchange Act of 1934, adopted in 1975, investment managers are required to file quarterly reports on Form 13F if they exercise “investment discretion” with respect to accounts holding equity securities with an aggregate fair market value of at least $100 million. Since then, U.S. public corporate equities have grown from $1.1 trillion to $35.6 trillion, and numerous industry players have made recommendations to the SEC to increase the Form 13F reporting threshold.

The SEC’s proposal would raise the reporting threshold to $3.5 billion, representing a similar threshold relative to the market today that the $100 million threshold represented relative to 1975. This is in line with the legislative history of Form 13F and the initial intention to capture only the largest investment managers. The proposed threshold would provide relief to numerous smaller managers.

Other proposed changes include having the SEC staff review the Form 13F reporting threshold every five years and adjust as necessary relative to the current equities market, removing the ability of investment managers to omit certain smaller positions and revising the instructions regarding confidential treatment of Form 13F information.

The proposed amendments will be published on the SEC’s website and in the Federal Register with a 60-day comment period from publication in the Federal Register.