Group Wants Faster Reveal Of Institutional Investor Positions

Feb 8 2013 | 11:41am ET

A group of corporations and a major stock exchange is pushing for speedier and more frequent disclosure of stakes held by big institutional investors, a change that could stymie activist investors.

The group—which includes the NYSE Euronext (an exchange listing over 2,500 securities), the Society of Corporate Secretaries and Governance Professionals and the National Investor Relations Institute—has petitioned the U.S. Securities and Exchange Commission to “amend the beneficial ownership reporting rules under Section 13(f)1 of the Securities Exchange Act of 1934...to shorten the reporting deadline."

Currently, large institutional investors (hedge funds, mutual funds, pension funds) must reveal their positions quarterly with a 45-day lag. The group argues that this has "adverse consequences" for both retail investors, denied the ability to track institutional investor holdings in their investments, and public companies, restricted in their ability to "identify and engage with their shareholders, including their ability to consult with shareholders regarding 'say on pay,' proxy access and other key corporate governance issues."

The group says the 45-day rule, adopted 30 years ago, is ill-suited to a world in which assets owned by institutional investors have seen "tremendous growth" and modern communication technology has lessened the burden of reporting.

The group also points to an as-yet unimplemented provision of the Dodd-Frank Act that requires short-sellers to disclose their positions monthly.

Taken together, the two regulations would trim the sails of activist investors like Pershing Square's Bill Ackman—currently in the headlines for shorting Herbalife—making it difficult for them to accumulate the shares necessary to shake-up boards or press for major changes.


In Depth

Q&A: Decathlon Capital On Revenue-Based Alternative Lending

Oct 30 2017 | 3:49pm ET

The explosion in private credit activity since the end of the financial crisis is...

Lifestyle

CFA Institute To Add Computer Science To Exam Curriculum

May 24 2017 | 9:25pm ET

Starting in 2019, financial industry executives sitting for the coveted Chartered...

Guest Contributor

CAIS: How Technology is Disrupting the Alternative Investment Industry

Nov 7 2017 | 5:35pm ET

If there’s one thing that alternative investment professionals can agree on, it...