What You Need to Do Now: New SEC Large Trader Reports

November 01, 2011

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, +44.20.7661.5336

Investment Management Partners:

Marion Giliberti Barish, 617.951.8801

David C. Boch, 617.951.8485

Lea Anne Copenhefer, 617.951.8515

Steven M. Giordano, 617.951.8205

Michael Glazer, 213.680.6646

Anne-Marie Godfrey, +852.3182.1705

Richard A. Goldman, 617.951.8851

Thomas John Holton, 617.951.8587

Barry N. Hurwitz, 617.951.8267

Roger P. Joseph, Practice Group Leader; Co-chair, Financial Services Area, 617.951.8247

Amy Natterson Kroll, 202.373.6118

Michael P. O’Brien, 617.951.8302

Nancy M. Persechino, 202.373.6185

Paul B. Raymond, 617.951.8567

Toby R. Serkin, 617.951.8760

L. Kevin Sheridan Jr., 212.705.7738

Edwin E. Smith, Co-chair, Financial Services Area, 617.951.8615

Joshua B. Sterling, 202.373.6556

Tim Burke, Co-chair, Financial Services Area, 617.951.8620

Stephen C. Tirrell, 617.951.8833

This article was originally published by Bingham McCutchen LLP.