-- - -- - 

17 CFR Part 249 

[Release No. 34-220381 

Reques:s for ConfldenUal Treatment 

Filed by lnrrtltutlonal Investment 

Managers 

AGENCY: Securities and Exchange 

Commission. 


ACTION: Adoption of amendmeilts to 


instructions to form. 

SUMMARY: The Commission is adopting 

amendments to the instructions to the 

form that prescribes the reporting 

requirements for institutional 

investment managers exercising 

investment discretion over accounts 

having, in the aggregate, mow than 

$100,000,000in exchange-traded or 

NASDAQquoted securities. The 

amendments simplify the procedures for 

requesting confidential treatment of 

certain risk arbitrage positions reported 

on the form and limit the time for which 

confidential treatment of commercial 

information may be requested. 

D A The ~ amendments will be effective 

June 24,1985. 

Fm FURTHER IWORMAt10W -ACE 

For questions relating specLfically to the 

subject of Us releare, contact Susan P. 

Hart Eeq., Office of Disclosure Policy 

and Adviser Regulation. (2021272-U)98; 

for questlone relating generally to 

reporting requirement8 for htitutional 

tnveetment managers under Section 13(0 

of the Securities Exchange Act of 1934 

and rules thereunder, contact Alice R 

Latimer, Tecbdcal Information 

Specialist Office of Chief Counsel. (2M) 

272-2036, Division of Investment 

Management Securities and Exchange 

Commission, 450 Fifth Street NW.. 

Washington, D.C. 20549. 

SUPPLEY~~*RY U~FORY~~K~: The

CO-sdon in announdng the adoption 

of amendments to General Instruction D 

to Form 13F [17 Cfi 249.3251 under 

Section 13(f) of the Securities Exchange 

Act of 1934 115 U.S.C. 78a et seq. as 

amended by Pub. L No. 94-28 (June4, 

1975)l ["the Exchange Act"], that 

simplify procedures for requeethq 

confidential treatment of certain 

arbitrage information filed on tho form 

and place time limitations on requests 

for confidential treatmerit of all 

commercial information. Under the 

revised procedures, the Commission will 

grant ynfidential treatment for a period 

not exceeding one year to information 

about security holdings which are open 

risk arbitrage positions if the reporting 

managkr represents in writing at the 

time report is filed that: (1)The security 

holding represents a risk arbitrage 

position that is open on the last day of 

tile calendar quarter for which a report 

is filed; and (2) the reporting manager 

has a reasonable belief as of the 

calendar quarter end that it may not 

close the entire position on or before the 

date on which the report is required to 

be filed with the Commission. In 

addition, the amendments require 

managers requesting confidential 

treatment for any commercial 

information, including open risk 

arbitrage positions, to limit their 

requests to a period of one year or less. 

The amendments balance the public 

disclosure ooncems of Section 13(fJ with 

the needs of institutional invertment 

managers to protect certain investment 

strategies and holdings bm public 

disclosure under the standards 

established by the statute and will 

im~rovethe Commission's overall 

adininistration of the Section 13[Q 

institutional disclosure program. 

In December, 1984. the Commiesion 

proposed amendments to General 

Instruction D to Form 13F under the 

Exchange Act that were published in 

Securities Exchange Act Release No. 

21539 (December 5,1084)."Ihe purpose 

of the proposal war to simplify the 

procedures for requesting confidential 

treatment of information about open risk 

arbitrage positions and to limit the 

amount of time for which confidential 

treatment of commercial information 

required by Form 13F could be 

requested. Eight commentators, 

including the Chainnan of the House 

Subcommittee on Telecommunications, 

Consumer Protection and Finance, 

brokerdealem and a trade association 

commented on the proposal. Six 

commentators generally supported the 

propod whiletwo qu&tid the basis 

for granting confidential treatment to 

I risk arbitrage information After 

considering the comments received, the 

Commission has decided to adopt the 

proposed amendments to General 

Instruction D incorporating cedain 

changes suggested by commentatom. 

These changes are discussed briefly 

below, 

I. Requests for Confidential Treatment 
 ,fopenas.Arbitmse Posjtjons 


As proposed, the amendment to 

paragraph 2(0 of General Instruction D 

required managera that request 

confidential treatment for information 

about open risk arbitrage pcsition

provide two good faith representat

As set forth in the proposal, these 

representations were, first, that th

security holding represents a risk 

abritrage position that is open on t

last day of the calendar quarter fo

which Form 13F is being filed: and

second, that the reporting manager 

no present intention to close the p

on or before the date the report is 

required to be filed with the 

Commission. The proposal provide

that, if these representations were 

confidential treatment would be gr

automatically for a period of one y

The Commission requested spec

comment on two aspects of the 

proposed amendment to paragraph 

Since section 13(fJ of the Exchange 

provides that commercial informat

can be granted confidential treatm

only in accordance with the Freed

Information Act ("FOIA),s the rel

requested specific comment on the 

Commission's authority to grant 

confidential treatment to a class o

holdings, in this case, open risk 

arbitrage positions. Comment was 

requested on the appropriateness 

year as the ihitial period for which 

confidential treatment would be 

granted. Only one commentator 

responded to both of theee request

generally supported both aspects o

proposal. However, this comment

also suggested changes to one of th

required representations and to th

procedures for requesting an exten

of the initial grant of confidential 

beatment. 

With respect to the aecond good 

representation (i.e., that the report

manager has no present intention 

close the open risk arbitrage positi

or before the date Form 13F is requ

to be filed with the Commission], t

commentator stated that the 

representation should be changed 

specify that the manager does not 

to close the position in its entirety 

reporting date. Otherwise, the 

commentator argued, managers mi

precluded from using the new 

procedures to request confidential 

treatment for positions that would 

partially liquidated by the filing da

The commentator asserted that 

disclosure of a partially liquidated 

position codd have a detrimental 

impact on the manager's ability to 

out the remaining portion of that 

position. 

The Commission has considered 

suggestion and modified the secon

representation in two ways. This 

-

'40 PR rsna (December12,1884) L 5U.S.C. 552, 

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pue s! aql po!.rad jo 'awg 
position could cause harm [e.g, 

competitors could trade against the 

position and impede the block 

positioner's ability to liquidate 

unobtrustively and without loss), and 

that this likelihood of competitive harm 

is no less substantial than the likelihood 

of harm to a risk arbitrageur. 

The Commission agrees that some of 

these arguments may have merit 

However, the Commission believes. 

particularly given the limited number of 

block positions maintained for 45 days, 

that it can adequately address requests 

for confidential treatment of b~ock 

position data on a case-by-caoe basis 

Therefore,such requests must continue 

to be made in accordance with General 

InstructionD Z(a)-(e). 

Liats of Subjectsin 17CFR Part 249 

Reporting and recordkeeping 

reqrtirements.Sedties. 

Text of Amendment to Gend 

lnnbucdo~to Form 13F 

chapter II of Title 17of the Code of 

Federal Regulations is amended as 

follows: 

PART249-GENERAL RULESAND 

~TIOWS,sEcum 

Ex~ACToF1934 

1.Tbe authority citationsfor Part 249 

continues to read as fpllows: 

z By revising par-&aph 2.dGeneral 

InstructionD of tba form prescri'bed in 

8 249.325of Title17of the Cod8of 

p&rd Regubltio~to r d as follows: 

Gemd-

. a * * * 

D." 

2.U a request for confidentid trdnwd h 

based up011a &dm that the LheW 

information bconfidentialcommercial or ilnand.lkrf~tktappWMe~tlosr 

requiwilby~~hw*)--if

tt.tearlD)scfinf~tiaacorrormbsewity 

hold- which repmsmtepm rbk erMtrese 

p~tioruMdmp~~~~~t.bt 

addhsatment of thornhddbWhave 

been made. dy tha Infomation reqhd in ~yrnaT=~L& 

foilowed wlth respect to the &hmt 

sec&jties holdings, ladudiry the extent of 

any program of ecquidtim end diqoaition f.Psash?dkStem"Ia- atmtqy.'' as ueedia~tsrWOrb.le4Inoknler 

actbftimdubbdrpostti~ 

b. Explain why public disclosure of the 

securities holdings would, in fact, be likely to 

reveal the investment strategy: consider this 

matter in light of the specific reporting 

requirement8 of Form 13F(e.g., securities 

holdings are reported only quarterly and may 

be aggregated in many cases): c. Demonstrate that such revelation of an investment strategy would be premature: 

indicate whether the manager war engaged in a program of acquisition or disposition of the 

security both at the enbf the quarter and at 

the time of the filing: address whether the 

existence of nuch a pmgram may otherwise 

be known to the public: 

d. Demonstrate that failure to grant the 

request for confidential treatment would be 

likely to cause substantial hann to the 

manager's competitive position; show what use competitors could make of the 

information and how harm to the manager 

could ensue. e. State the oeriod of time for which 

confidential Gatment of the murities 

holdis is reauested. The time mriod 

epecitGd maGot excwd one year hm the 

date the report ie required to be Wed wlth the 

Commission. 

f. For security holding6 which represent 

open rIsk arbitrage positions, the requa 

muat include good faith reprerentatlorn &at: 

(1)the eecurity holdins repmnt8 a risk 

arbitrage position open on the last day of 

calendar quarter for wbldr,the repart b Ned; 

and 

(2) the reporting managerhar a mraonable 

belief ar of the calendar qaarter end that It 

may not close the entlre position on or balm 

the date the report brequired to be filed with a 

the Commiwion. 

U the representatiom stated above are 

made in writing at the timePorn 13Pbfiled, 

the subject oecurlty holdhg~will 

automatically beaccorded wnftdentid 

treatment for a period oftlp to oneyearh 

the date the report is requtndto be Bled with 

the Commission. 

& At the 8~phti0llof tb0 pdod fO? wbicb 

confidential treatment har been granted 

ptum~anttoitem [e) or item (0oftfiir 

-graph ["expiration &te8'), the 

Commioeion,without additid notice to the 

reporting manager, willmake such rscurlty 

holdingepublic unlera a de now requmt for 

confidential treatment of the informattonthat 

meets the requirement8 of iteau (aHe] olthe 

paragraph, bfiledwlth the Commlrrlaa at 

least fourteen (14) day8 in advance of thr 

expiration dbtQ 

Regulatory FlexibilityCecWatlar 

Pursuant to section Wb) of the 

Regulatory FlextbiUty Act [15U.8.C 

W[b)], the Chairman of the Commisrion 

previously certified that adoption of the 

amendments to Gend Instruction D of 

Fonn 13Fwill not have a rignificant 

impact on a rubetantial number of rmall 

entities. No comments were received on 

that certification. 

SZalutoty Bas& 

Tb.Commirvionhereby adopts there 

amendmentsbPaw l3P punwant to 

thewtheritJr mt forth h rectlonr 3(b), 

13[f) and 23 of the Securities Exchange 

Act of 1934 115 U.S.C. 78c(b),78m(f),and 

78(78w)]. 

By the Commission. 

lohn wheeler, 

Secretary. 

May 14,1965. 

[PRDoc. 85-12589 Piled 5-23-85: 8:45 am] 

HW)(Q CODL (blW1-U 

' SEC DOCKET/ 11