Schedule 13F

Schedule 13F gives the public a window into what large institutional investment managers own. This includes most established hedge fund managers. These quarterly reports create a comprehensive database of institutional stock holdings that serves multiple regulatory and market purposes.

The SEC requires these filings to promote transparency in financial markets. When large institutions must disclose their holdings, it helps regulators monitor market activity and gives other market participants insight into institutional investment patterns.

The filing requirement applies only to "Section 13(f) securities," which Rule 13f-1SEC regulation that defines which securities are subject to Schedule 13F reporting requirements and establishes filing procedures for institutional investment managers. defines precisely. These include registered securities that trade on national securities exchanges or appear on automated quotation systems run by registered securities associations.

In practical terms, this scope covers most U.S. exchange-listed stocks, exchange-traded funds (ETFs), shares of closed-end investment companies, standardized stock options, warrants, and certain convertible debt securitiesFinancial instruments that can be converted into another form of security, typically bonds or preferred shares that can be converted into common stock.. The definition specifically excludes mutual fund shares and other open-end investment company securities, since these already have separate reporting requirements.

The SEC maintains an official list of Section 13(f) securities that it updates quarterly. This list helps managers determine which of their holdings require disclosure.

Institutional investment managers must file Form 13F when they meet specific criteria. The key requirement is that they must have investment discretionThe authority granted to an investment manager to make trading decisions on behalf of clients without obtaining prior approval for each transaction. over accounts holding "Section 13(f) securities" worth at least $100 million. This threshold is measured on the last trading day of any month during a calendar year.

Investment discretion means the manager has the authority to decide which securities to buy and sell for their clients' accounts. Section 13(f) securities are specific types of investments that the SEC has designated for reporting purposes, primarily U.S. stocks and related instruments.

Once a manager crosses the $100 million threshold in any single month, they trigger a four-filing requirement. They must file an initial report within 45 days after the calendar year ends. Then they must file three additional quarterly reports, each due within 45 days after the end of the first three quarters of the following year. Managers must complete all four filings even if their holdings drop below $100 million after the initial trigger.

The definition of "institutional investment manager" is broad. It includes any organization (but not individuals) that invests in securities for its own account. It also includes any person or entity that makes investment decisions for someone else's account, including individual portfolio managers.

Form 13F filers must provide specific details for each qualifying security they own. The required information includes the company name, the exact type of security and its class, the CUSIP number (a unique identifier for the security), how many shares or the principal amount they own, and the total fair market value of their position.

Managers must also indicate their voting authority for each security. They report whether they have sole voting control, shared voting control with other managers, or no voting control at all. When multiple managers share investment discretion over the same securities, they must identify their co-filers to avoid double-counting in the regulatory database.

Starting July 1, 2024, institutional investment managers who file Form 13F gained an additional reporting obligation. They must now also file annual reports on Form N-PXAnnual report form that institutional investment managers must file to disclose how they voted on executive compensation matters at public companies in their portfolios. that disclose how they voted on executive compensation matters at public companies in their portfolios.

These Form N-PX filings became due annually by August 31, starting in 2025. The reports cover "say-on-pay" votes that managers cast during the 12-month period ending June 30 of each year. Say-on-pay votes are non-binding shareholder votes on executive compensation packages that public companies must hold periodically.

This requirement adds transparency to how institutional managers exercise their voting rights on behalf of their clients, particularly on compensation-related matters that often generate significant shareholder interest.

Schedule 13F filings create both disclosure obligations and competitive intelligence opportunities for hedge funds. The filings provide insight into how funds position their portfolios, which can be valuable information for competitors, regulators, and market researchers.

However, the disclosure system has built-in limitations that reduce its impact on fund strategies. The 45-day filing delay means that disclosed positions may not reflect current holdings, especially for funds that trade frequently. The quarterly reporting schedule also provides only periodic snapshots rather than real-time position data.

Some funds use these limitations strategically, knowing that their most current positions remain confidential while older positions become public. Funds with high portfolio turnover may find that their disclosed holdings bear little resemblance to their actual current positions by the time the filings become public.