Legal Developments and Considerations in Business Law for March/April 2011:

Section 13(f) Filings.

Institutional investment managers that have investment discretion over $100,000,000 or more in certain equity securities must report those holdings on Form 13F filed through the SEC’s EDGAR system.  Under SEC guidelines, an institutional investment manager includes entities that invests in (buys or sells) securities for its own account.  Institutional investment managers also include natural persons or entities that exercise investment discretion over the account of another natural person or entity.   Institutional investment managers can include investment advisors, banks, insurance companies, broker-dealers, pension funds, and even corporations.  The definition is in no way limited to the aforementioned entities.

Recently the SEC’s Office of Inspector General has brought to the attention of the Division of Investment Management serious failures in the SEC’s monitoring for delinquent filers and review process for those Form 13Fs that are filed.   In response, the Division, in working with the Office of Compliance Inspections and Examinations, will be stepping up its enforcement efforts in the coming year.  Now is the time to ensure that your clients, some of whom may be filers under Section 13(f), are in compliance with their reporting requirements.

For more specifics on the Section 13(f) filing requirements, including a detailed analysis of particular filing issues and the current SEC objectives, please see “What the Institutional Investment Manager Needs to Know About SEC Reporting under Section 13(f).”  This detailed white paper can be accessed at 13(f) White Paper.