2 Quick Points to Simplify the SEC Form 13F
Gain insight into what top institutional investment managers are invested in
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The United States Securities and Exchange Commission (SEC) is an independent federal government regulatory agency responsible for protecting investing and maintaining fair and orderly functioning of the securities market. One of the items the SEC requires of institutional investment managers, organizations such as hedge funds, pension funds, and insurance companies, with at least $100 million in assets under management to file every calendar quarter the Form 13F.
A 13F discloses the equity holdings of investment managers and can help provide the general public, such as retail investors, with what institutional investors are holding. Even though 13F filings can help disclose what institutional money is doing, there are some major flaws. The following two quick points will help to simplify 13F filings further:
1. Why the 13F Was Created
2. Issues That Make the 13F Unreliable
1. Why the 13F Was Created
The United States Congress established the 13F in 1975, intending to provide the United States public a view of the holdings of the nation’s largest institutional investors. Essentially, it was created in hopes that it would increase overall investor confidence in the integrity of the nation’s financial market. As stated earlier, examples of institutional investors are hedge funds, pension funds, and insurance companies. Retail investors have used 13F filing to gauge what institutional investors are putting their money towards. Even with the “transparency” of the 13F, there are still key issues with it.
2. Issues That Make the 13F Unreliable
When it comes to 13F filings, it is important to note that a 13F can be filed up to 45 days after the end of a calendar quarter, which means that it is not a true representation of an institutional investor’s most recent holdings. Most institutional investors submit their 13Fs as late as possible to not give away all their most recent and important holdings.
Another key issue with 13Fs is that institutional investment managers are only required to report long positions. What does this mean…
