Large Trader Rule

It has come to my attention that many investment advisers may not be aware of some of the new SEC Rules.  One in particular is SEC Rule 13h-1 imposing new filing requirements on “Large Traders.”

What constitutes a “Large Trader” you ask.  It is a person, including investment advisers, that “directly or indirectly exercises investment discretion over one or more accounts and effects transactions for the purchase or sale of any NMS security for or on behalf of such accounts, by or through one or more registered broker-dealers, in an aggregate amount equal to or great than the identifying activity level.”

The identifying activity level is an aggregate amount equal to or greater than either 2 million shares or $20 million in a single day; or 20 million shares or $200 million in a calendar month.

The filing requirement is to identify yourself to the SEC and make certain disclosures on Form 13H.  The original deadline was December 1, 2011. Upon receipt of the Form 13H, the SEC will assign the Large Trader an identification number known as an LTID. The Large Trader must provide its LTID to each registered broker-dealer effecting transactions on its behalf. The registered broker-dealer(s) are required to maintain records concerning the Large Trader’s trades.

Take a look and see if this may apply to you or so you don’t inadvertently become a “Large Trader”.



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