Currently, managers must submit those confidential treatment requests to the SEC in paper form. The Amendments will require confidential treatment requests to be filed electronically on the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system as a separate, nonpublic filing. Requests must include a cover letter describing the basis justifying confidential treatment as well as a confidential Form 13F report for those securities for which the manager is requesting confidential treatment. The Amendments also require managers to demonstrate in the cover letter that the information requested to remain confidential is customarily and actually kept private by the manager and that failure to grant the request for confidentiality would be likely to cause harm to the manager, consistent with the standard articulated in a 2019 decision by the U.S. Supreme Court.3
Additionally, the Amendments adopt certain changes to Form 13F, including
- requiring disclosure of the filer’s Central Registration Depository (CRD) number and SEC file number, if any4
- permitting optional reporting of the Financial Instrument Global Identifier (FIGI) for any security reported
- requiring summary page indication where confidential treatment is being requested for some or all of the manager’s holdings
- technical changes, including requiring all dollar values to be rounded to the nearest dollar instead of the current requirement to round to the nearest $1,000
The SEC indicated it adopted the Amendments to promote efficiency, transparency, and operational resilience by modernizing how information is filed and disclosed to the public.5 For example, electronic filings address certain logistical and practical issues, such as the burden of paper filings during disruptive events like the COVID-19 pandemic, and are more readily accessible and searchable.
Effective Date
The electronic filing requirements for the 13(f) confidential treatment requests will be effective on August 29, 2022. This means that it will not affect the upcoming August 15 deadline for second quarter 2022 Form 13F filings but will be available by the November 14 deadline for the third quarter 2022 Form 13F filings. The SEC is also providing a six-month compliance transition period following the August 29 effective date, meaning that all confidential treatment requests will be required to be filed electronically via EDGAR starting with the first quarter 2023 Form 13F filings.
The amendments to Form 13F will be effective on January 3, 2023, and thus will take effect with the Form 13F filings for the fourth quarter 2022.
1 “Electronic Submission of Applications for Orders under the Advisors Act and the Investment Company Act, Confidential Treatment Requests for Filings on Form 13F, and Form ADV-NR; Amendments to Form 13F,” Exchange Act Release No. 34-95148 (June 23, 2022), available at https://www.sec.gov/rules/final/2022/34-95148.pdf.
2 The term “institutional investment manager” is broadly defined as an entity that either invests in, or buys and sells, securities for its own account. Institutional investment managers include, for example, banks, insurance companies, broker-dealers, corporations, and pension funds that manage their own investment portfolios.
3 See Food Mktg. Inst. v. Argus Leader Media, 139 S. Ct. 2356 (2019). The Supreme Court held that when the owner of financial information presents the information as private to the government, with the intent and continued understanding of privacy, the information is "confidential" within the meaning of the Freedom of Information Act, Exemption 4.
4 The manager must also file the CRD number and SEC file number, if any, of any other manager included in the “List of Other Managers Reporting for this Manager” table on the cover page.
5 “SEC Adopts Rules to Require Electronic Filing for Investment Advisers and Institutional Investment Managers,” (June 23, 2022), available at https://www.sec.gov/news/press-release/2022-113?utm_medium=email&utm_source=govdelivery.
