As experts in the investment adviser industry, Hardin assists its clients with various regulatory filings such as Form 13F and Form 13H.  Under the Securities Exchange Act of 1934 (the “Exchange Act”), advisers who exercise investment discretion over accounts which hold exchange traded securities may be subject to reporting requirements as set forth in Section 13 of the Exchange Act.

What is a 13F filing?

Section 13(f) under the Exchange Act requires institutional investment managers with investment discretion over $100 million or more in equity securities traded on a securities exchange or the National Association of Securities Dealers Automated Quotation System (NASDAQ) to file quarterly reports with the SEC on Form 13F within 45 days of quarter end.

Initial 13F Filing.  An adviser’s obligation to file its initial Form 13F starts when the firm has discretion of at least $100 million in equity securities traded on a securities exchange or the National Association of Securities Dealers Automated Quotation System (NASDAQ) (“13(f) Securities”).  The initial filing has to be made within 45 days of year end (February 15) for the first calendar year it has met that $100 million threshold.

Quarterly Filings.  Once a manager’s obligation to file Form 13F is established, the filing obligation continues for a minimum of three (3) consecutive calendar quarters, regardless of whether the Adviser still meets the threshold.  An adviser can stop making these filings after making all required filings so long as the advisor no longer meets the reporting threshold as of the last trading day of any month during the current calendar year.

What is a “Large Trader”?

The SEC defines a large trader as “a person whose transactions in National Market System (NMS) securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month.”

Rule 13h-1 under Section 13(h) of the Exchange Act, requires “Large Traders” to identify themselves on Form 13H, obtain a Large Trader Identification Number (LTID) and provide the LTID to U.S. broker-dealers through which it trades. Such U.S. broker-dealers are required to maintain records of the Large Traders’ transactions, perform certain monitoring functions, and report to the SEC upon request.

What is the deadline for filing Form 13H?

Initial Filing:  A large trader must file an initial Form 13H promptly after effecting transactions in exchange-listed securities and certain options that equal or exceed (i) 2 million shares or $20 million during any calendar day or (ii) 20 million shares or $200 million during any calendar month (referred to as the “Identifying Activity Level”).

Quarterly Filing Obligations:  An adviser is required to amend its Form 13H on a quarterly basis if any of the information has changed within 10 days of calendar quarter-end.

Annual Filing Obligations.  Regardless of whether any quarterly amendments are needed, advisers must submit an annual amendment within 45 days of calendar year-end unless the large trader files for inactive status or submits a termination filing.  Advisers can submit a combined quarterly and annual amendment, as applicable, but must do so within the 10-day quarterly amendment window.

Inactive Status.  If a large trader does not meet or exceed the Identifying Activity Level noted above during the previous calendar year, the large trader can file for inactive status.  At such time as the large trader meets or exceeds the Identifying Activity Level, the large trader must promptly file for reactivated status.

Termination.  Firms that cease operations or are acquired by another firm should submit a termination filing.

How can Hardin help?

Our service is proactive.  We contact clients before the filing deadline and get the required data to complete the form so its submitted it on time.  If your firm is new to the process, or has limited resources, let us help!  Give us a call.