IM Guidance Update

Octo ber 2013 | No. 2013-08

US Securities and Exchange Commission

 Division of Investment Management

FORM 13F CONFIDENTIAL TREATMENT REQUESTS BASED ON A CLAIM 

OF ONGOING ACQUISITION/DISPOSITION PROGRAM 

This IM Guidance Update is meant to assist institutional investment managers that 

may wish to request confidential treatment for certain information reported on Form 

13F by elaborating on the types of information that might be relevant in evaluating a 

confidential treatment request for an Ongoing Acquisition/Disposition Program in 

a Reportable Security.

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Section 13(f) of the Securities Exchange Act of 1934 (Exchange Act)

Since 1975, Congress has required any investment manager that exercises investment 

discretion with respect to accounts holding certain U.S. exchange-traded equity securities 

(Reportable Securities) having an aggregate fair market value of $100 million or more 

(Institutional Manager), to file with the Commission quarterly reports of those holdings 

under Section 13(f) of the Exchange Act. The quarterly reports, filed on Form 13F, must 

be filed within 45 days of the end of the calendar year during which the $100 million 

threshold was satisfied and within 45 days of the end of the first three calendar quarters 

that follow. An Institutional Manager’s Form 13F must include, as of the end of the 

calendar quarter, each Reportable Security’s name and CUSIP number, the number of 

shares held, and the market value of the position, generally aggregated across accounts 

with respect to which the Institutional Manager exercises investment discretion.

Section 13(f) mandates that the Commission tabulate the information appearing in the 

quarterly reports and promptly disseminate the information to the public. Section 13(f) 

also permits the Commission, in relevant part, to delay or prevent the public disclosure 

of information “as it determines to be necessary or appropriate in the public interest or 

for the protection of investors . . . in accordance with [the Freedom of Information Act 

(FOIA)].” Under Section 13(f)(5), “[i]n exercising its authority under this subsection, the 

Commission shall determine (and so state) that its action is necessary or appropriate 

in the public interest and for the protection of investors or to maintain fair and orderly 

markets.”
IM GUIDANCE UPDATE 2

Confidential Financial Information

One of the several categories of information protected under the Commission’s FOIA 

rules concerns matters that “disclose trade secrets and commercial or financial information obtained from a person and privileged or confidential” (Confidential Financial 

Information). An Institutional Manager seeking to delay or prevent public disclosure of 

any such Confidential Financial Information reported on Form 13F must submit a written 

request for confidential treatment (CT Request) following the procedures set forth in 

Rule 24b-2 under the Exchange Act and the Commission’s Instructions to Form 13F.

IM staff reviews and acts on CT Requests concerning Form 13F information pursuant to 

delegated authority from the Commission. Staff guidance for potential CT Request filers 

is available in the form of Frequently Asked Questions at http://www.sec.gov/divisions/

investment/13ffaq.htm and a 1998 staff letter (1998 Letter) available at http://www.sec.

gov/divisions/investment/guidance/13fpt2.htm.

Ongoing Acquisition/Disposition Program

One particularly common type of CT Request for information reported on Form 13F, 

under the FOIA category of Confidential Financial Information, concerns information 

that would reveal an Institutional Manager’s ongoing program of acquisition or 

disposition of a Reportable Security (Ongoing Acquisition/Disposition Program). 

The 1998 Letter, among other things, provided detailed guidance to Form 13F filers 

that might be making CT Requests for an Ongoing Acquisition/Disposition Program. 

In particular, the 1998 Letter elaborated on five categories of information that Form 13F 

requires to be provided in a CT Request for an Ongoing Acquisition/Disposition Program 

in a Reportable Security, in order for the Commission to be able to make an informed 

decision about whether delaying or preventing public disclosure is necessary or appropriate in the public interest and for the protection of investors or to maintain fair and 

orderly markets:

•	 details about the specific investment program being followed with respect to 

a Reportable Security and its ultimate objective;

•	 an explanation of how the public would be able to discern the Institutional 

Manager’s strategy with respect to the Reportable Security from the data 

reported on Form 13F;

•	 information demonstrating that the program is ongoing, so that public disclosure 

would be premature; 

•	 a demonstration of the likelihood of substantial harm to the Institutional Manager’s 

competitive position in the Reportable Security if the CT Request is not granted; and

•	 the period of time for which confidential treatment is requested. 
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IM GUIDANCE UPDATE 3

Additional Guidance

In reviewing CT Requests for Ongoing Acquisition/Disposition Programs since issuing 

the 1998 Letter, the staff has further identified information, for each of the above five 

categories, that is particularly helpful in reaching an informed decision on whether 

delaying or preventing public disclosure is necessary or appropriate in the public 

interest and for the protection of investors or to maintain fair and orderly markets. 

Such information includes the following:

•	 A CT Request Should Provide Details about the Ongoing Acquisition/Disposition 

Program.

The description of the program in a CT Request should be specific to each 

Reportable Security covered by the CT Request.

Discuss when the program started and the initial transaction(s).

Discuss how far the program has progressed (for example, the number of 

shares of the Reportable Security purchased until each of the quarter end 

and the CT Request date, the number of days traded, price ranges).

Describe the program’s ultimate goal, including as a percentage of the 

Reportable Security issuer’s total outstanding securities.

•	 A CT Request Should Explain Why Public Disclosure Would Reveal the Program.

Discuss whether any information is publicly available about the Institutional 

Manager’s position in the Reportable Security and, if so, provide a description 

of the publicly available information. 

Explain why public disclosure on Form 13F likely would reveal the program, 

given that Form 13F disclosure generally provides only an historical “snapshot” 

of aggregated holdings in the Reportable Security and does not require disclosure of, for example, the timing or price of, or reason for, any purchase or sale 

transaction.

Explain how the public would discern from Form 13F data the Institutional 

Manager’s intent to acquire/dispose of the Reportable Security in the future.

 

•	 A CT Request Should Demonstrate that the Program is Ongoing So That Public 

Disclosure Would Be Premature.

Provide information to demonstrate that the program is ongoing both at the 

end of the quarter and at the time the CT Request is filed (for example, discuss 

any purchases or sales of the Reportable Security that took place between the 

end of the quarter and the filing of the CT Request and provide the details of 

the purchases or sales). 
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IM GUIDANCE UPDATE 4

Provide details about the Institutional Manager’s trading activity in the Reportable Security, including an explanation of why the program was ongoing during 

any periods when no transactions occurred. 

A CT Request Should Demonstrate the Likelihood of Substantial Harm.

Specify the manner in which the Institutional Manager’s competitive position in 

the Reportable Security is likely to be substantially harmed by public disclosure 

of Form 13F data. 

Provide a description and comparison of any prior instances of market reaction 

to the Institutional Manager’s public disclosure of its position in an issuer (for 

example, discuss the manner in which the prior public disclosure was made, the 

broader stock market context, the issuer’s capitalization, industry sector, and 

issuer-specific movements at the time surrounding the prior public disclosure). 

Explain why the likely harm to the Institutional Manager’s competitive position 

in the Reportable Security should be viewed as “substantial.”

A CT Request Should Justify The Requested Period of Confidential Treatment.

Explain the projected timeframe for the Institutional Manager to reach the 

ultimate objective of its investment program in the Reportable Security.

Discuss whether there is any anticipated public disclosure, in accordance 

with a regulatory requirement (for example, Schedule 13D/G) or otherwise, 

that may be relevant to the requested period of confidential treatment.

Discuss any other factors that may be relevant to the confidential treatment 

period (for example, the amount of capital invested or available for investment, 

market price of the Reportable Security, the Institutional Manager’s existing 

holdings, target size (if any) of the position, market capitalization, and trading 

volume). 

The information described above is not intended as an exclusive list of considerations 

that a potential CT Request filer might wish to present in requesting confidential treatment for an Ongoing Acquisition/Disposition Program. The staff also notes that there 

is no set “formula” for a successful CT Request, and that all relevant information will 

receive appropriate consideration. The staff hopes that this guidance will further assist 

Institutional Managers that might be considering filing CT Requests for information 

reported on Form 13F based on a claim of an Ongoing Acquisition/Disposition Program 

in a Reportable Security. 

 
IM GUIDANCE UPDATE 5

This IM Guidance Update summarizes the views of the Division of Investment Management 

regarding various requirements of the federal securities laws. Future changes in laws or 

regulations may supersede some of the discussion or issues raised herein. This IM Guidance 

Update is not a rule, regulation or statement of the Commission, and the Commission has 

neither approved nor disapproved of this IM Guidance Update.

The Investment Management Division works to:

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protect investors

promote informed investment decisions and 

facilitate appropriate innovation in investment products and services 

through regulating the asset management industry.

If you have any questions about this IM Guidance Update, please contact:

Chief Counsel’s Office/Public Inquiry

Phone: 202.551.6825

Email: IMOCC@sec.gov