The purpose of this article is to inform the various securities market participants about new Exchange Act Rule 13h‐1, its specifics and the requirements it may impose.
The paper outlines the various requirements of the Rule and additional background information and some clarifications based on the SEC adopting release.
The Rule requires “large traders”, as defined in the Rule, to self‐identify to the SEC and to obtain from the SEC a large trader identification number (“LTID”) and provide the LTID to each US‐registered broker‐dealer through which it effects transactions in NMS securities. The Rule also requires US‐registered broker‐dealers to provide to the SEC, on request, data on large traders' transactions in NMS securities by the morning after the transactions are effected; and it requires US‐registered broker‐dealers to maintain books and records, and perform certain monitoring functions, with respect to these transactions. The SEC has also adopted Form 13H under Exchange Act Section 13(h). A large trader must submit to the SEC Form 13H as an “Initial Filing” to receive its LTID and file various periodic amendments thereafter.
The paper provides practical guidance from experienced securities lawyers. The authors hope the discussion in the paper will enable affected market participants, which include US‐ registered broker‐dealers as well as other persons within the Rule's definition of large trader, to be informed about and to prepare for compliance with the Rule.
Blanc, R.D., Schloendorn, D., Kramer, H.L., Miller, M.R. and Comstock, M.B. (2011), "SEC adopts large trader reporting system", Journal of Investment Compliance, Vol. 12 No. 4, pp. 31-39. https://doi.org/10.1108/15285811111188144Download as .RIS
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