News & Blog - Capital Markets

Lambert Update on SEC’s Proposed 13F Filing Rule Change

By Jeff Schoenborn, Managing Director

This week the NYSE and Nasdaq submitted public letters to the U.S. Securities and Exchange Commission in concert with more than 300 companies each, highlighting concerns about the SEC’s proposed rule changes that could dramatically reduce the number of institutional investment managers disclosing their stock holdings.

“Hundreds of US-listed companies, including Coca-Cola, Procter & Gamble and Ford, have come out against a proposal from the securities regulator that would shield the vast majority of hedge funds from disclosing their stock market holdings,” the Financial Times reported on Monday. “The proposed rules governing so-called 13F filings would relieve all but the world’s largest 550 investment managers from disclosing their public equity holdings.”

The NYSE wrote that “the material reduction in information and ownership transparency that would result from the proposal would deliver a debilitating blow for investor relations teams who lead shareholder engagement for public issuers and are in constant search for information regarding the owners of their companies,” while the Nasdaq pointed out that “the Proposal does not fundamentally address the negative impact of raising the 13F threshold on retail investors and small asset managers, many of whom rely on 13F data when making investment decisions.”

Retail investors are speaking up for themselves, too, with the New York Times’ DealBook reporting that many of the more than 1,500 initial public comments were from individual investors opposing the rule change.

At Lambert, we called on the SEC in August to consider withdrawing the proposed rule changes, given the potential impact on our clients, particularly small- and mid-cap companies that we believe would bear a disproportionate impact from implementation. Lambert also joined the National Investor Relations Institute and 237 public companies in signing NIRI’s comment letter to the commission last month, and we were very pleased to host the IR association’s President & CEO Gary LaBranche and VP of Communications & Member Engagement Ted Allen on a recent Capital Markets Cocktails episode to discuss the issue.

The commission’s public comment period remains open until September 29, and we invite corporate leaders who have not yet weighed in to consider doing so. We created an SEC public comment letter for companies to download, and Lambert’s investor relations professionals are available to address executives’ and IR officers’ questions about how the proposed rule change could impact their companies.