In July the Securities and Exchange Commission adopted new Rule 13h-1 under the US Securities Exchange Act. The Rule imposes filing obligations on “large traders,” as defined, and subjects stockbrokers that service large traders to recordkeeping, monitoring and reporting requirements. The purpose of Rule 13h-1 is to assist the SEC in identifying the most significant participants in the US securities markets and gathering information on their trading activity. Large traders must file an initial report on Form 13H with the SEC by December 1, 2011. Stockbrokers must begin maintaining the required records, monitoring large trader activity and be able to respond to requests from US regulators with required information, including with respect to “unidentified large traders,” by April 30, 2012.
Fund managers, investment advisers, institutional investors and other financial firms should review the definition of “large trader” in the new Rule and consider whether they are subject to these new US reporting requirements. If the new requirements apply, they should prepare to file the initial Form 13H by December 1, 2011. Rule 13h-1 defines a “large trader” as a person whose transactions in US exchange-listed securities, including equities and options (generally speaking), equal or exceed 2 million shares or US$20 million during any calendar day, or 20 million shares or US$200 million during any calendar month.
For more information, click here to read our August 16, 2011, alert on Form 13H.
If you have any questions relating to this update, please contact one of the following lawyers:
Thomas John Holton, Partner, Investment Management
Investment Management Partners:
Thomas John Holton
This article was originally published by Bingham McCutchen LLP.