(b) the use of funds received from customers; 

(c) the existence of arbitrage opportunities available to his customers; and 

(d) the safety of the investment in the 

securities being offered; and 

(5) Induce customers to repose trust and 

confidence in him, causing such customers 

to believe that he would deal fairly with 

them in connection with all purchases of securities. 

Accordingly, the Commission finds that the Respondent Wohl willfully violated Section 17(a) of the Securities Act and Section 10(b) of the Exchange Act and 

Rule lob-5 thereunder. 

(B) Failure to Supervise 

From early 1976, through October, 1977, Schultz and In 

several Instances, Sacks, were aware of the large position held by Wohl In certain securitles In his personal 

trading account and of the large size and frequency of 

trades In that account, but made no effort to determlne 

from Wohi the real source of his capltal for the 

purchase of those securitles, which capital would have 

necessitated a flnanclal source far in excess of Wohl's 

flnanclal capablllty. Also, Sacks and Schultz failed to 

supervise their back-offlce operations personnel so that 

the transfer of checks made payable to Schultz for the 

payment of securltles purchased by customers of the 

flrm would not be credited, as they were, to Wohl's 

personal trading account. 

Accordingly, the Commission finds that Respondents 

Sacks and Schultz failed to reasonably supervise persons subject to their supervision with the view to preventing violations of the Securities Act and Exchange 

Act and the rules and regulations thereunder, such persons having committed violations of said provisions, 

as more particularly alleged and set forth in paragraphs 

A (1) through A (5) of Section II of this order. 

REMEDIAL SANCTIONS 

Respondents each have submitted an offer of settlement whereby they consent to the entry of an order imposing certain sanctions on them. Accordingly, IT IS 

ORDERED that 

(1) Respondent Wohl be, and hereby is, 

barred from association with any broker, 

dealer, investment adviser or investment 

company. 

(2) Respondent Sacks be, and hereby is, 

suspended for a period of 30 days from 

being associated with any broker, dealer, 

investment adviser or investment company. 

(3) The registration of Respondent Schultz 

with the Commission by suspended for a 

period of 30 days. 

By the Commission. 

George A. Fitzsimmons 

Secretary 

SECURITIES EXCHANGE ACT OF 1934 

Release No. 14852 

(S7-687 comment period expries 8/31 /78) 

Filing and Reporting Requirements Relating to Institutional lnvestment Managers 

AGENCY: Securities and Exchange Commission. 

ACTION: Final rules. 

SUMMARY: The Commission announces the adoption 

of a rule and form governing the reporting requirements 

of institutional investment managers exercising investment discretion over accounts having in the aggregate 

more than $100,000,000 in exchange-traded or 

NASDAQ-quoted equity securities. Under the rule, as 

adopted, such managers are required to file a report 

within 45 days after the end of each calendar year, 

identifying those securities, the aggregate amounts 

thereof held, the nature of such investment discretion 

and any voting authority. The rule and form will implement the institutional lnvestment disclosure program 

as mandated by Congress and establish the Commlssion as the central repository for data concerning the 

influence and impact of institutional investment managers on the securities markets. The Commlsslon Is 

also soiiclting comments concerning the usefulness 

and burdens associated with quarterly reporting. . . -

14lSEC DOCKET 
z 

a 

ons 

nstituDption 

ments 

nvestregate 

ed or 

~le, as 

report 

year, 

rounts , 

retion 

mple- , I )gram 

nmis- 

~g the 

manion is 

~lness 

Exchange Commission, 500 North Capitol Street, 

Washington, D.C. 20549. All submissions should refer 

to File No. S7-687, and will be made available for 

public inspection at the Commission's Public Reference Section, Room 6101, 1100 L Street, N.W., Washington, D.C. 20005. 

Michael S. Lichtenthal , Esq. (202-755-9034) or 

W. Scott Cooper, Esq. (202-755-1 792) 


Division of Investment Management, 


Securities and Exchange Commission, 


500 Norfh Capitol Street 


Washington, D.C. 20549. 


SUPPLEMENTARY INFORMATION: The Securities 

and Exchange Commission (the "Commission") today 

announced the adoption of Securities Exchange Act 

Rule l3f-1 [17 CFR 240.1 3f-1) and related Form 13F [17 

CFR 249.3251, pursuant to Section 13(f) of the Securities Exchange Act of 1934 [15 U.S.C. 78a et seq. as 

amended by Pub. L. No. 94-29 (June 4,1975) ] (the "Exchange Act"). The rule and form adopted today differ 

from the original proposal published for comment on 

March 30,1977, in Exchange Act Release No. 13396 [42 

FR 168311 in several respects. The modifications reflect the commission's determination to simplify its 

approach to implementation of the basic institutional 

disclosure program mandated by Section 13(f) and are 

also responsive to certain of the many comments received. In addition, certain technical changes have 

been made in order to clarify the rePoding requirements and to properly coordinate the institutional disclosure program contemplated by Section 13(f) with 

the beneficial ownership rules under the Exchange Act. 

Briefly, under the rule as adopted today, an institutional investment manager exercising investment discretion (as defined in Secton 3(a)(35) of the Exchange 

Act [15 U.S.C. 78(c)(a)(35) ] ) with respect to accounts 

having more than $100,000,000 or more in exchangetraded or NASDAQ-quoted equity securities on the last 

trading day of any of the twelve months of a calendar 

year must file annually with the Commission, and, if a 

bank, with the appropriate banking agency, within 45 

days after the last day of such calendar year, five 

copies of Form 13F. The form requires the reporting of 

the name of the issuer, and the title, class, CUSlP 

number, number of shares or principal amount in the 

case of convertible debt, and aggregate fair market 

value of each such equity security held. The form also 

BACKGROUND 

In July 1968, the Congress directed the Com

make a study and investigation of the purc

and holding of securities by institutional inve

types in order to determine the effect of thos

upon the maintenance of fair and orderly 

markets, the stability of those markets, an

ests of issuers of securities and of the pub

letter transmitting the Institutional Investor 

port2 to Congress in April 1971, the Commi

"gaps in information about the purchase

holdings of securities by major classes of i

investors," and recommended that the Exc

be amended to provide the Commission w

authority to require, on a continuous basis, 

disclosure of securities holdings and transa

all types of institutional investors. Other rec

tions for improved disclosure were made by 

dent's Commission on Financial Structure a

tion (1971) and by the Senate Subcommitte

rities in its 1973 "Securities Industry 

In 1975, as part of the Securities Acts Amen

1975, Congress adopted Section 13(f) of the 

Act. The reporting system required by Sect

intended to create in the Commission a cen

tory of historical and current data about the 

activities of institutional investment man

thereby to advance certain objectives. First, 

ing system is designed to improve the body 

data available and thus facilitate considera

influence and impact of institutional 

managers on the securities markets and 

policy implications of that influence. Secon

ing the Commission responsible for all gath

cessing, and dissemination of the data, 

The study was conducted pursuant to Se

of the Exchange Act (Pub. L. 90-438, am

91-410, September 25, 1970) [15 U.S.C. 78s

H.R. Doc. No. 64, 92d Cong., 1st Sess. 1

Report of the Senate Subcommittee on 

Committee on Banking, Housing, and Urb

93d Cong., 1st Sess. (Comm. Print 1973). 

SEC D
intended to permit establishment of uniform reporting 

standards and a uniform centralized data base.4 

Section 13(f) of the Exchange Act empowers the Commission to adopt rules which would create a reporting 

and disclosure system to collect specific information 

concerning Section 13(d)(l) [15 U.S.C. 78m(d)(1)15 

equity securities held in accounts over which certain 

institutional investment managers exercise investment 

discretion. It gives the Commission broad rulemaking 

authority to determine the size of the institutions required to file reports, the format and frequency of the 

reporting requirements, and the information to be disclosed in each report. The statute directs the Commission to make available to the public, for a reasonable 

fee,.a list of all equity securities described in Section 

13(d)(l) of the Exchange Act and to disseminate to the 

public the information contained in the reports. The 

Commission is also directed to consult with other 

regulatory agencies to attempt to achieve uniform, 

nonduplicative reporting by, and minimize the compliance burden on, institutional investment managers. 

As stated above, on March 30, 1977, the Commission 

published for comment proposed Rule 13f-1 and related Form 13F. As proposed, the rules would have required institutional investment managers exercising 

investment discretion over accounts holding in the 

aggregate at least $100,000,000 of certain equity securities, designated "Section 13(f) securities," to file a 

Form 13F on a quarterly basis to report certain information regarding those accounts. "Section 13(f) securities" would have been defined to include all classes 

of securities described in Section 13(d)(l) of the Exchange Act that are listed on a national securities exchange or quoted on the automated quotation system 

of a registered association (e.g., the NASDAQ system) 

and that are contained in the most recent list of Section 

13(f) securities published by the Commission. 

Under the proposed rule an institutional investment 

manager would have been deemed to exercise investSee, Report of the Senate Committee on Banking, 

Housing, and Urban Affairs (Senate Report No. 75, 

94th Cong., 1st Sess. 85 (1975)). 

Any equity security of a class which is registered 

pursuant to Section 12 of the Exchange Act [15 U.S.C. 

7811, or any equity security of an insurance company 

which would have been required to be so registered 

except for the exemption contained in Section 

12(g)(2)(G) of the Exchange Act, or any equity security 

issued by aclosed-end investment company registered 

under the'lnvestment Company Act of 1940 [15 U.S.C. 

80a-1 et seq.]. 

161SEC DOCKET 

ment discretion over an account not only when it had 

the power described in Section 3(a)(35) of the 

Exchange Act (which defines investment discretion) G

[15 U.S.C. 78(c)(a)(35)] but also when it was deemed 

to be the "beneficial owner" of the securities in the account under Section 13(d) of the Exchange ~ct.6 

Proposed Form 13F would have consisted of two 

schedules. Schedule A would have required the reporting of the aggregate fair market value of all types of securities, including exempted securities, held by the accounts over which t he manager exercises investment 

discretion, broken down by type of account. Schedule 

B would have required information as to the number of 

shares and fair market value of each issue of Section 

13(f) securities held by each type af account, as well as 

the institutional investment manager's voting authority 

with respect to such securities. Information about 

holdings of less than 10,000 shares or $200,000 would 

not have been required to be reported except in the 

aggregate on Schedule A. 

REVISION OF THE PROPOSED RULE 

In publishing the proposed rule for comment, the Commission recognized that a reporting system such as the 

one envisioned by Section 13(f) could involve significant costs to institutional investors, as well as unforeseen complications. Therefore, the Commission 

sought views "not only on the specific proposals set 

forth, but also on how the Commission can best implement 13(f)." Specifically, the release posed ten questions designed to elicit comment about the proper 

scope of the institutional disclosure program. Topics 

covered by the questions included the desirability of 

collecting additional information as authorized by Section 13(f) (such as detailed information about securities not traded on an exchange or reported on 

NASDAQ, transactional data, and aggregate purchases 

and sales); the frequency of reporting; the appropriateness and importance of reporting by type of account; 

and the $100,000,000 reporting threshold. 

The Commission received approximately 70 letters of 

comment on the rule proposal, mostly from those who 

would be directly affected. The Commission also consulted with numerous other governmental agencies as - mandated by the statute. After careful consideration of 

all comments, and after careful reexamination of the 

program in light of the fundamental objectives of the 

legislation and the anticipated uses for the data to be 

collected, the Commission decided to simplify the program. As adopted, Rule 13f-1 will implement the basic 

institutional disclosure program mandated by 

Rule 13d-3 [17 CFR 240.134-31 defines beneficial 

owner for purposes of Section 13(d). 
leemed 

the ac- 1 

6 

lf two 

report- 

; of se- , 

the ac- I 

stment 

hedule ' 

~ber of 

iection 

nlell as , 

thority 

about 

would 

in the 

! Comas the 

;ignifirnforeission -. 

31s set 

implequesproper 

ropics 

lityof 

y Secjecuri- 

?d on ., 

:hases 

priatecount; 

ers of 

e who 

3 conies as 

ion of 

of the 

of the 

to be 

e probasic 

,d by 

1 

-- - 

P 	 reached on the ultimate scope of the program. Follow

ing is a summary of the comments and explanation of 

the changes in the rule under topic headings which 

correspond generally to the major subjects covered by 

the ten questions posed in Exchange Act Release No. 

1 3396. 

Basic coverage of the rule: reporting threshold and frequency and content of reports 

Many commentators asserted that compliance with the 

program would be expensive and burdensome and 

argued that, at least initially, the reports should be 

made as simple as possible. Most favored reporting 

annually rather than quarterly, eliminating reporting by 

type of account, and leaving the reporting threshold at 

$100,000,000. 

The Commission has determined that it is appropriate 

at this time to impose only that reporting burden which 

is necessary to satisfy the statutory requirement that 

the Commission establish a centrally located, and publicly disclosed, body of information about the extent of 

holdings by major institutions of equity securities of 

publicly held companies which have significant markets. The Commission believes that this objective will 

ml	

be achieved if investment managers of accounts containing $100,000,000 or more of exchange-traded and 

NASDAQ-quoted securities file annual reports identifying their holdings of those securities. As the Commission, reportin'g entities, and persons interested in the 

information reported gain experience with the system, 

thecommission will be in a better position to evaluate 

the need for or interest in expanding the reporting 

group, increasing the frequency of reports, and collecting additional information. 

Steps Taken to Avoid Duplicative Reporting 

The release publishing the original proposal also solicited comments on possible steps which could be taken 

to avoid unnecessary duplicative reporting by, and 

minimize the compliance burden on, institutional investment managers. A large number of comment 

letters alluded to the fact that duplicative reporting 

would exist under the proposed rule and the beneficial 

ownership rules under Section 13(d) of the Exchange 

~ct.~ Many commentators argued that the proposed 

Generally, Section 13(d) requires a report by any 

person (or group of persons) who, as a result of an 

acquisition, becomes the beneficial owner of more 

than five. percent of certain classes of equity securities 

of certain issuers. 

rency; insurance companies indicated tha

with state regulatory agencies; and inve

visers stated that investment companies th

which are registered under the Investmen

Act of 1940 [15 U.S.C. 80a-1 et seq.], are 

file quarterly reports with respect to thei

holdings. 

Consultation with other Government Agenc

13(f) as noted above, required extensive c

with other federal and state agencies that h

thority to require reports of a similar natu

that might be required under Section 13(f)

mission and other agencies have made e

forts to avoid unnecessary duplication, bu

less, there will remain significant overlaps i

Many agencies which collect information ab

tional securities holdings have found tha

been unable to eliminate reporting requir

cause their reports are designed to mee

needs. The reason lies in the fact that each 

collects related data has a perceived indepe

latory reason for collection and has a popu

which it collects information which is broad

group within the scope of Section 13(f). F

generally, except with respect to the Trust 

Report Form which is filed with the fede

agencies and reports subject to the Compt

Currency's reporting requirements set forth 

Regulation 9 [12CFR 9.102, 39 FR 281441, th

overlap with 13(f), because the primary 

many other regulators is in who controls re

tiEeesSandnot investment discretion. Sinc

Department Report Form collects informati

different from that which would be colle

Rule 13f-1, the banking agencies have con

receipt of the latter would not permit elimin

former. However, the Comptroller of the C

announced the elimination of its quarterl

equity securities transaction (form CC-751

tive after the third quarter of this year, a

elimination of its annual report of holding

securities (Form CC9g510-05). 

Coordination of the reporting requirements 

tions 13(f)and 13(d). As mentioned above, 

mentators indicated that duplicative repo

exist under Sections 13(f) and 13(d). They 

that the overlap would occur principally b

definition of investment discretion in pro

13f-1 included the concept of beneficial 

under Section 13(d), and the definition o

ownership under Section 13(d) included the 

investment power. Therefore, an institutio

ment manager with a portfolio of Section 1

SEC 
ties exceeding $100,000,000 whose accounts acquired 

more than a five percent interest in a class of securities 

of an issuer would be subject to the reporting requirements under both Sections 13(f) and 13(d). 

The Commission included "beneficial ownership" in 

the definition of investment discretion in the proposed 

rule in an effort to minimize the burden on institutions 

which might be required to report under both Section 

13(d) and Section 13(f). However, many commentators 

perceived problems with this approach, and the Commission has determined that it is unnecessary to augment the statutory definition in Section 13(f). Accordingly, the concept of beneficial ownership has been 

deleted from the rule as adopted. 

I 

Many commentators discussed the overlap between 

Sections 13(d) and (g),8 and it was concluded variously 

tha? those who filed under Section 13(d) should be 

exempted from Section 13(f); those who reported under 

Section 13(f) should be exempted from Section 13(d); 

or that Section 13(f) should serve as the exclusive 

reporting obligation for institutional investors disclaiming any intention of investing for purposes of influencing control or management. Section 13(f) and the 

beneficial ownership reporting requirements have different purposes, and it is not possible to eliminate all 

overlap by making one or the other exclusive. However, 

the Commission has attempted to make the requirements compatible to the extent possible. Accordingly, 

{ fTiiTemirements 07s~eduk13G, the newly adopted 

"short form" beneficial ownership reporting form for 

certain institutions9 may be partially satisfied by attaching pertinent information from Form 13F. 1 

ElAfter Rule 13f-1 was proposed for comment, 

Congress adopted the Domestic and Foreign 

Investment Improved Disclosure Act of 1977 [Title II of 

Pub. L. 95-2131. Among other things, this legislation 

added new Section 13(g) to the Exchange Act which 

modifies and supplements the existing beneficial 

ownership requirements of Section 13(d). 

On April 21, 1978, the Commission announced the 

amendment of beneficial ownership rules under 

Section 13(d) and Schedule 13D [17 CFR 240.13d-1011 

which were adopted on February 24, 1977, and 

scheduled to take effect on April 30, 1978, as well as a 

new Schedule 13G and the rescission of Form 130-5 

[17 CFR 240.13d-1021. Proposed Schedule 13G would 

correspond to former Form 13D-5. However, certain 

substantive changes have been made in order to 

achieve a more satisfactory balancing of the costs and 

benefits attendant to the disclosure elicited 

thereunder, and insurance companies would now be 

eligible to use the form [See Exchange Act Release No. 

146921. 

Since applicable portions of Form 13F could be attached in partial satisfaction of Schedule 13G, the 

Commission has decided to conform the filing requirements of Form 13F to those of Schedule 13G. Therefore, Form 13F will be required to report holdings as of 

the last day of the year and to be filed 45 days thereafter.1° The extension of the time for filing from 30 

days to 45 days is consistent with the views of a number of commentators who indicated that the 30 day filing requirement created an undue burden. 

As proposed, and as adopted today, Rule 13f-1 states 

that "an institutional investment manager shall also be 

deemed to exercise 'investment discretion' with respect to all accounts'over which any person under its 

control exercises investment discretion." A few commentators recommended that a bank trust department 

consistently exercising investment discretion with no 

interference from its holding company be excepted 

from this provision and be treated independently both 

for purposes of applying the $100 million jurisdictional 

test and the filing requirements. They reasoned that 

the bank trust department is the entity responsible in 

fact for exercising investment discretion. However, the 

Commission has determined not to amend that portion 

of the rule proposal, and, therefore, not to except bank 

trust departments from the rule's applicability, for two 

reasons. First, this requirement is consistent with the 

approach taken in the beneficial ownership rules and 

proposed rules under Sections 13(d) and 13(g) which 

facilitates coordination of the various reporting requirements. If Rule 13f-1 did not require reporting by 

control persons and the beneficial ownership reporting 

requirements did, information in Form 13F reports 

would in many cases not be usable by an institutional 

manager in partially fulfilling its obligations under 

13(d) and 13(~).l Second, taking the position that 

control persons exercise discretion with respect to securities which may be under the direct management of 

controlled persons is more realistic and more consistent with the purposes of the institutional disclosure 

tegislation. With respect to bank holding companies, it 

10 It should be noted that, if beneficial ownership 

exceeds ten percent as of the last day of any month 

during the year, a Schedule 13G would also be required 

to be filed within 10 days after the first such month. 

l1Elimination of "beneficial ownership" from the 

definition of "investment discretion" in Rule 13f-1 does 

not affect the usefulness of Form 13F for purposes of 

reporting beneficial ownership. To the extent an 

institutional investment manager was required to 

report beneficial ownership securities, and 13F report 

as 

reporting 

to those 

requirement. 

securities might still partially fulfill its am

18ISEC DOCKET 
rhere 

; as of 

there- 

)m 30 

numay filstates 

Iso be 

th rejer its 

comtment 

ith no 

:epted 

/ both 

tional 

j that 

ble in 

?r, the 

ortion 

t bank 

)r two 

th the 

s and 

which 

lg reng by 

ort i ng 

?ports 

tional 

under 

i that 

to seent of 

~nsislosure 

ies, it 

ership 

nonth 

quired 

)nth. 

n the 

1 does 

ses of 

nt an 

ed to 

report 

fill its 

,- 

mately the holding company has control over the trust 

department's personnel as well as its entire organizational structure. To clarify these points, the Commission has added an instruction to Form 13F which indicates that controlling and controlled companies (such 

as bank holding companies and their subsidiaries) 

shall report their investment discretion as shared (See 

Special Instruction v (Item 6) of Form 13F). When two 

institutional investment managers share discretion as 

to certain securities, one must report for both, and the 

other must file a statement identifying who is filing for 

it.12 

Technical Modifications. The rule, as originally published for comment, contained an instruction providing 

a de minimis exemption for aggregate holdings of 

fewer than 10,000 shares or less than $200,000 principal amount or fair market value. A holding of fewer 

than 10,000 shares may have a market value in excess 

of $200,000, and therefore have the potential to impact 

upon the market. Consequently, the Commission has 

made the de minimis exemption available only for 

holdings of fewer than 10,000 shares and less than 

$200,000 principal amount and fair market value. 

As published for comment, Rule 13f-1 (c) stated that if 

"a person controls the issuer of a class of equity securities described in Section 13(d)(l) of theExchange Act, 

that security shall be deemed not to be a 'Section 13(f) 

security' with respect to the controlling person." The 

purpose of including such an exemptive provision in 

the rule was to insure that large multitiered companies, 

or holding companies controlling certain public corporations, would not be required to report if the stock of 

the issuer which it controlled was exchange-traded or 

NASDAQ-quoted and worth over $100 million. It was 

felt that the rule was not meant to cover such parentsubsidiary relationships. However, an institutional 

investment manager, otherwise required to report because it exercises investment discretion over exchange-traded or NASDAQ-quoted equity securities 

worth over $100 million, could also have significant 

holdings in a particular company, and thereby control 

it. The Commission does not believe that such significant holdings were meant to be excluded from the 

l2Item 6 of Form 13F, as well as Special Instructions 

iv and v, while not included in the original rule as 

published for comment, clarify that institutional 

investors, reporting on behalf of others with whom 

investment discretion is shared, must segregate the 

shares of each such institutional investor on whose 

P behalf the reoort is filed. See, OPERATION OF THE 

must include in its reports the shares of 

which it controls. 

A number of commentators stated that G

struction B to proposed Form 13F ought to b

to indicate which institutional investment m

responsible to report where two or more 

exercise investment discretion with respe

same account. Under that instruction, only o

tional investment manager is to file a re

respect to such an account. Therefore, for e

would be possible for an investment advise

the jurisdictional test itself, to report for al

vestment companies it manages, or any i

company with over $100 million in 13(f) se

report itself. To minimize the reporting b

Commission believes that such affiliated in

investors should be permitted flexibility to 

one report through their investment adviser

separately. Therefore, although General Ins

has not been changed, several "Special Ins

have been added to the Form which shoul

clarify the relationships between affiliated in

investment managers and the Section 13(f) 

reported on Form 13F. (See OPERATION 

RULE). 

Exemptions. Another area in which the Co

sought specific comment was whether it wou

sistent with the purposes of Section 13(f) fo

mission to exempt from the requirements o

t ion institutional investment managers 

investment discretion outside the United S

respect to accounts held outside the United 

proposed, the rule contained no such exem

Commission received a number of letters f

mentators taking the position that such 

should properly be exempt since it would b

densome and expensive to collect inform

cerning such accounts, and since such in

would not, in general, significantly affect th

ported concerning United States accounts. 

gard, it was suggested by one commentato

rule contain a de minimis exemption for man

ing a very small percentage of their busi

foreign accounts. The Commission also 

number of comments indicating that it wou

appropriate to exempt managers from repor

mation concerning such foreign accounts w

accounts are comprised of United States 

since investments by such accounts may ha

pact upon United States markets. The Co

agrees with the latter view and has determi

exempt such accounts as a class. It should 

however, that Section 13(f)(2) provides 

Commission may be rule or order exempt a

SEC D
tional manager or security individually from any or all 

provisions of the section or the rules thereunder under 

the proper circumstances. 

Several commentators indicated that college endowment funds and other non-profit institutions should be 

exempt from the reporting requirements under Section 

13(f). They reasoned that such institutions are already 

burdened with numerous government reports and that 

the value of the information which would be collected 

from such institutions would be minimal since very few 

would be directly affected. The Commission has determined not to exempt such institutions from the reporting requirements under 13(f) because the Commission 

believes that any such institution holding sufficient 

Section 13(f) securities to meet the threshold reporting 

requirements under the rule would have the same potential to impact upon the market as other large institutional investors. Further, in light of the revisions made 

to the original proposal, the Commission does not believe that the reporting requirements would impose an 

onerous burden on the affected organizations. 

Data Availability. The release publishing Rule 13f-1 for 

comment also solicited views on whether reports 

should be required to be filed in machine processable 

form, such as computer cards. Most commentators 

were against such a requirement since it would be particularly burdensome for those without computer capability; others suggested computer tape, and others 

preferred to have an option. In light of those comments, and since it would be difficult to obtain tape in 

a form compatible with its own computer system, the 

Commission has determined that it would be preferable to receive reports in hard copy form. This would 

also enable the Commission to fulfill its obligation to 

make the reports conveniently available "promptly after 

filing."13 

The Commission sought public comment concerning 

useful methods of public dissemination to investors, 

issuers, and other institutional investment managers. 

Several commentators suggested computerizing the 

information and making tapes or discs available to the 

public at cost. A few commentators indicated that the 

information should be published in the Commission's 

Digest and/or Statistical Bulletin. Comments were 

also received from a few vendors who felt that ttie 

Commission should leave the task of dissemination to 

competing outside firms which would publish the data 

for sale to the public. 

l 3 Section 13(f)(3) directs the Commission to tabulate 

the information contained in the reports and make it 

available to the public conveniently and promptly. 

The Commission intends to make the reports which are 

filed immediately available to the public at the Commission's Public Reference Room, 1100 L Street, 

Washington, D.C. 20549. In addition , approximately 60 

.L 

days after the forms are filed, the Commission intends 

to produce reports which will provide (1) a list of institutions showing what securities each exercises investment discretion or voting authority over, and (2) a list 

of exchange-traded and NASDAQ-quoted securities, 

showing what institution exercises discretion and 

voting authority over what amount (i.e., the Commission will identify the securities over which a particular 

institution exercises investment discretion and the institutions which exercise investment discretion and 

have voting authority over the securities of a specified 

corporation). The Commission will continually review 

the methods utilized to disseminate the data to the 

public in an effort to insure that the information is 

readily accessible. 

OPERA TlON OF THE RULE 

The following discussion is included in order to assist 

all interested persons in their understanding of and 

compliance with the filing and disclosure provisions of 

Rule 13f-1 and related Form 13F adopted herein. However, attention is directed to the actual text of the rule 

and form for a more complete understanding. To 

illustrate the rule's operation, the following discussion 

examines its applicability to an investment adviser 

exercising investment discretion with respect to accounts having more than $100,000,000 in Section 13(f) 

securities. 

Under the rule, an investment adviser exercising 

investment discretion with respect to accounts having 

more than $100,000,000 in Section 13(f) securities at 

the end of a month would be required to file Form 13F 

with the Commission containing information relating 

to those accounts. In addition, if one of those accounts 

contained more than $100,000,000 in Section 13(f) 

securities itself, and the account was other than a natural person, that account (e.g., an investment company) would also be subject to the rule's reporting requirements.' In such a case, the instructions indicate 

that either the adviser or the investment company 

could file with respect to the securities in such account, but not both. If the investment adviser were to 

file on behalf of the investment company account it 

would indicate on the cover page of the form the name 

and 13(f) file number (which will be assigned after the 

first reports are filed) of the investment company on 

whose behalf it is filing. At the same time the investment company whose securities are reported by the investment adviser would file an information statement 

naming the entity reporting on its behalf. 

With respect to the reporting of information as to those 

accounts of the investment adviser having less than 

20lSEC DOCKET 
:ely 60 

 tends 

instinvesta list 

rities, 

I and 

rnmisticular 

he inn and 

tcified 

*eview 

to the 

ion is 

assist 

~f and 

Ins of 

HOWe rule 

g. To 

~ssion 

dviser 

to ac1 13(f) 

cising 

)aving 

ies at 

n 13F 

4ating 

ounts 

13(f) 

a nacomng redicate 

nPanY 

:h acere to 

unt it 

name 

er the 

ny on 

nvesthe in2ment 

those 

i than 

i 

name of the issuer, title and class, CUSlP number, fair 

market value, number of shares and type of voting 

authority.14 

If the investment adviser were to report on behalf of an 

investment company, or any other institutional investment manager with whom there is shared investment 

discretion (See Special Instruction iv), additional segregations would be necessary. This would be the case 

whether or not the investment company had assets 

valued at $100,000,000 or more. For example, an investment adviser might report on one line that it has 

sole investment discretion with respect to 1,000 shares 

of XYZ stock (in the aggregate). The investment adviser 

might report on the next line that it has shared investment discretion (Item 6(b)) with an investment company with respect to 2,500 shares of XYZ stock (in such 

case it would name the investment company on the 

cover page if it was reporting on its behalf, and place 

the number from the cover page in response to ltem 7). 

On the next line, the investment adviser might report, 

in response to ltem 6(c), that it has shared investment 

discretion with another investment adviser (which adviser has less than $100,000,000 under management) 

with respect to another 3,000 shares of XYZ stock.15 In 

all of the above cases responses to Items 4-8 would be 

set forth separately (Special Instructions iv and v). The 

foregoing examples would also be applicable to other 

situations. (See special Instruction v (Item 6)). 

AVAILABILITY OF LIST OF 13(f) SECURI'l7ES 

Pursuant to Section 13(f)(3) of the Exchange Act, the 

Commission intends to publish a list of Section 13(f) 

securities in order to facilitate a determination by an 

institution as to whether it is required to report under 

the rule. This list will normally be available to anyone 

for a reasonable fee from the Securities and Exchange 

Commission, 500 North Capitol Street, Washington, 

D.C. 20549, 15 days after the end of the calendar year. 

However, for the year 1978, a list will be available as 

soon as possible after the effective date of the rule in 

l4If there is sole voting authority with respect to 

certain shares, and shared authority with respect to 

others, the number of each such shares would be set 

forth separately under ltem 8. 

l5In such case it would not have to respond to ltem 7 

because it would not be reporting on behalf of that 

adviser since that adviser does not meet the threshold 

reporting requirements. 

REQUEST FOR COMMENT 

Virtually all the responses to the Commission

in Release No. 34-13396 for public views o

quency of reports were in favor of annual r

quarterly reporting. However, quite recently 

mission has received several letters arguing 

quarter1 y rather than annual reporting. Th

mentators have pointed to the fact that qua

would provide information to brokers and in

trading desks to facilitate the function of blo

and enhance the liquidity of the marketpl

have also stated that quarterly reporting wou

more complete information to corporations c

their stockholdings since annual reports wou

become outdated. On the other hand, many 

commenting on the original proposal indic

quarterly reporting would be overly burdenso

the original proposal was based on a diff

more complex form, the Commission bel

interested persons should have the oppo

comment on the usefulness of quarterly re

the information to be collected on the more 

form the Commission is now adopting, as w

burdens and costs associated therewith. l

spect to costs, the commission would appr

tailed information on direct and indirect c

start-up costs and continuing costs. In a

comments on the merits of annual as oppose

frequent reporting, the Commission requests 

on whether a change in the frequency of re

any, should be made for the first calendar 

1979 or should be delayed until after expe

been gained with the operation of the rule. 

ested persons are invited to submit their wri

to the Commission by August 31, 1978. 

CERTAIN FINDINGS 

As required by Section 23(a)(2) of the Exchan

U.S.C. 78w(a)(2)1, the Commission has cons

impact which the rule and form adopted her

have on competition. The Commission has f

the preparation and disclosure of information 

to Rule 13f-1 will not significantly burden co

l6The Commission will also give attentio

relationship of the quarterly reports on Form 

by investment companies under the In

Company Act of 1940 [17 CFR 274.106

institutional investor disclosure program. 

SEC DO
Furthermore, the Commission has determined that any 

possible resulting competitive burden will be outweighed by, and is necessary and appropriate to 

achieve, the benefits of this information to investors. 

As mandated by Section 13(f)(4), in exercising its authority under Section 13(f) the Commission has determined that its action is appropriate in the public interest and for the protection of investors. In the release 

publishing proposed Rule 13f-1 for comment the Commission specifically invited comments as to the steps 

the Commission could take to minimize the compliance burden. As explained above, a number of revisions have been made to reduce the burden on institutional investors. The Commission finds that the cost of 

the rules adopted herein are not unreasonable in light 

of the purposes of the statute. 

AUTHORITY; EFFECTIVE DATE 

The Commission hereby adopts Rule 13f-1 and Form 

13F, effective July 31, 1978, pursuant to the authority 

set forth in Sections 3(b), 13(f) and 23 of the Exchange 

Act [I5 U.S.C. 78c(b), 78m(f) and 78~1. The Commission finds that any changes in the rule and form 

adopted from those published in Release No. 34-13396 

[42 FR 163811 are either technical in nature or are less 

burdensome than previous requirements, so that 

further notice and rulemaking procedures pursuant to 

the Administrative Procedure Act [5 U.S.C. 553 et seq.] 

are not necessary. However, the Commission has decided to submit this rule to the Comptroller General for 

such review as may be appropriate under the Federal 

Reports Act [44 U.S.C. 35121. The effective date of this 

rule accordingly reflects inclusion of the 45-day period 

which that statute allows for such review [44 U.S.C. 

351 2(c)(2)]. 

Accordingly, Parts 240 and 249 of Title 17 of the Code of 

Federal Regulations are amended by adding 

55240.13f-1 and 249.325 as follows. 

By the Commission. 

George A. Fitzsimmons 

Secretary 

5240.13f-1 Reporting by institutional investment 

managers of information with respect to accounts over 

which they exercise investment discretion. 

22lSEC DOCKET 

(a) Every institutional investment manager which exercises investment discretion with respect to accounts 

holding section 13(f) securities, as defined in paragraph (c) of this section, having an aggregate fair 

market value on the last trading day of any month of 

any calendar year of at least $100,000,000 shall file a 

report on Form 13F [§249.325 of this chapter] with the 

Commission within 45 days after the last day of such 

calendar year. 

(b) For the purposes of this rule, "investment discretion" has the meaning set forth in section 3(a)(35) of 

the Act 115 U.S.C. 78c(a)(35) 1. An institutional investment manager shall .also be deemed to exercise "investment discretion" with respect to all accounts over 

which any person under its control exercises investment discretion. 

(c) For purposes of this rule "section 13(f) securities" 

shall mean equity securities of a class described in 

section 13(d)(l) of the Act that are admitted to trading 

on a national securities exchange or quoted on the 

automated quotation system of a registered securities 

association. In determining what classes of securities 

are section 13(f) securities, an institutional investment 

manager may rely on the most recent list of such securities published by the Commission pursuant to 

section 13(f)(3) of the Act [I5 U.S.C. 78m(f)(3)]. Only 

securities of a .class on such list shall be counted in 

determining whether an institutional investment manager 

and only 

must 

those 

file a 

securities 

report under 

shall 

this 

be 

rule 

reported 

1240.131-,(a)] 

in such 

(P

report. Where a person controls the issuer of a class of 

equity securities which are "section 13(f) securities" as 

defined in this rule, those securities shall not be 

deemed to be "section 13(f) securities" with respect to 

the controlling person, provided that such person does 

not otherwise exercise investment discretion with respect to accounts with fair market value of at least 

$100,000,000 within the meaning of paragraph (a) of 

this section. 

$249.325 Form 13F, report of institutional investment 

manager pursuant to section 13(f) of the Securities Exchange Act of 1934. 

This form shall be used by institutional investment 

managers which are required to furnish reports pursuant to section 13(f) of the Securities Exchange Act of 

1934. (15 U.S.C. 78m(f)] and Rule 13f-1 thereunder 

[5240.13f-1 of this Chapter]. 

Form 13F For Reports of Institutional Investment Managers Pursuant to Section 13(f) of the Securities Exchange Act of 1934 and Rule 13f-1 thereunder. 

GENERAL INSTRUCTIONS 

A. Rule as to Use of Form 13F. Form 13F shall be 

used for reports of institutional investment managers 
? fair 

lth of 

file a 

.h the 

such 

iscre35) of 

ivest9 "in- 

; over 

ivest- 

.itiesW 

ed in 

ading 

n the 

~rities 

~rities 

tment 

secunt to 

Only 

ted in 

f-1 man- (a)] 

such 

xis of 

3s" as 

ot be 

ect to 

I does 

th releast 

(a) of 

tment 

zs EXitment 

pursuAct of 

?under 

t Man- 

?s Ex- 

 all be 

lagers 

6. Rules to Prevent Duplicative Reporting. If two or 

more Managers, each of which is required by Rule 13f-1 

to file a report on Form 13F for the reporting period, 

exercise investment discretion with respect to the 

same securities, only one such Manager shall include 

information regarding such securities in its reports on 

Form 13F. Such Manager shall name any other Manager with respect to which the filing is made in the 

manner described in Special Instruction i. Any Manager having any securities over which it exercises investment discretion reported by another Manager or 

Managers shall file a cover page and a separate page 

indicating the name of the entity or entities reporting 

on its behalf. If such other Manager or Managers report 

for only part of the securities with respect to which a 

Manager has investment discretion, the Manager shall 

complete the form with respect to securities not otherwise reported. 

C. Filing of Form 13F. Five copies of Form 13F shall 

be filed with the Commission within 45 days after the 

end of the calendar year 1978 and each calendar year 

thereafter. As required by section 13(f)(4) of the Act, a 

Manager which is a bank, the deposits of which are insured in accordance with the Federal Deposit Insurance Act, shall file with the appropriate regulatory 

agency a copy of every report filed with the Commission pursuant to this subsection by or' with respect to 

such bank. The appropriate regulatory agency with 

which a copy of this report is to be filed for: 

(1) a national bank or a subsidiary of any 

bank or bank operating under the Code of 

Law for the District of Columbia or a subsidiary of any such bank is the Office of the 

Comptroller of the Currency, Administrator 

of National Banks, Washington, D.C. 20219; 

(2) a state member bank of the Federal 

Reserve System or a subsidiary of any such 

bank or a bank holding company which is a 

bank (other than a bank which is required to 

file with the Comptroller of the Currency or 

the Federal Deposit lnsurance Corporation) 

is the Board of Governors of the Federal Reserve System, Washington, D.C. 20551; 

(3) a bank insured by the Federal Deposit 

lnsurance Corporation (other than a bank 

which is a member bank of the Federal Reserve System) or a subsidiary thereof is the 

Federal Deposit lnsurance Corporation, 

Washington, D.C. 20429. 

rities held by the account of a natural pe

estate or trust (other than a business tru's

ment company). Therefore, a Manager sha

separate statement clearly identifying that i

with reference to the appropriate Item an

issuer, title, class and CUSlP number, inclu

and check digit. 

In addition, the Commission may, as it 

necessary or appropriate in the public intere

prevent public disclosure of any inform

under section 13(f) of the Act, in accord

section 552 of Title 5, United States Code 

5521. Requests for delay or prevention of 

closure should identify clearly the infor

which the request is made, as well as the p

of section 552 of Title 5, United States C

which the request is based and should inclu

ment setting forth the request and the reas

applicability of such provision(s). 

E. List of 13(f) Securities. The list of 13(f

can be obtained at a reasonable fee from the 

and Exchange Commission, 500 North Cap

Washington, D.C. 20549. 

SPECIAL INSTRUCTIONS 

i. If this form is used to report with re

to more than one Manager, the list of al

Managers (other than the one filing this 

required to be on the cover page shall 

alphabetical order and numbered con

tively. 

ii. In calculating fair market value, u

value on the last trading day of the ca

year. Values may be rounded to the n

one thousand dollars. 

iii. The Manager filing the report mu

port holdings of all classes of securitie

pearing in the most recently published 

section 13(f) securities, except that ho

of fewer than 10,000 shares (or less 

$200,000 principal amount in the case o

vertible debt securities) and less 

$200,000 aggregate fair market value (a

tion holdings to purchase only 

amounts) need not be reported. 

Holdings of options must be reported o

the options themselves are section 13

curities. For purposes of the $100,00

reporting threshold, only the value of 

SEC DO
options should be considered, not the value 

of the underlying shares. However, the responses to ltems 1-5 and 7-8 shall be given in 

terms of the securities underlying the options, not the options themselves. ltem 6 

shall be answered in terms of the discretion 

to exercise the option. A separate segregation in respect of securities underlying options shall be made in response to each of 

the items, coupled with a designation "(p)" or 

"(c)" following such segregated response to 

ltem 5, referring to securities subject respectively to put and call options. No response to 

ltem 8 need be given for securities subject to 

reported call options. 

iv. In responding to ltems 4-8, list securities of the same issuer and class with respect 

to which the Manager exercises sole investment discretion separately from those with 

respect to which investment descretion is 

shared. The instructions for ltem 6 describe 

in detail how to report shared investment discretion. 

v. Instructions for each Item. 

ltem 1. Give the name of the issuer for each 

class of security reported as it appears in the 

current list of section 13(f) securities published by the Commission. 

ltem 2. Give the title of class of the security 

reported as it appears in the current list of 

section 13(f) securities published by the 

Commission. 

ltem 3. Give the 6-digit issuer CUSlP number, the 2-digit issue number suffix, and the 

I-digit check digit. 

ltem 4. Give the market value of the holding 

of the particular class of security as prescribed by Special Instruction ii. 

ltem 5. Give the total number of shares 0f.a 

class of security or the principal amount of 

such class. 

ltem 6. This item requires the report of 

holdings of securities of a class to be segregated according to the nature of the investment discretion which may be exercised as to 

such securities. Accordingly, unless the 

reporting manager exercises sole investment 

discretion with respect to all such securities, 

do not report as to such securities in the aggregate, but divide the report as to such securities in the manner described below. 

1. Segregate aggregate shares as to which 

sole investment discretion is exercised, and 

report them on one line. Check column 6(a). 

2. Then segregate shares as to which investment discretion is shared in the manner 

described below: 

(1) controlling and controlled companies 

(such as bank holding companies and their 

subsidiaries); 

(2) investment advisers and investment 

companies advised by them; and 

(3) insurance companies and their separate accounts. 

3. Further segregate shares as to which 

investment discretion is shared in the manner 

described in the preceeding instruction to 

separately identify each instance in which 

investment discretion is shared with another 

manager on behalf of whom this report is 

filed. Report each such instance on separate 

lines, and check column 6(b) in each case 

(see instructions for ltem 7). On a separate 

line report in the aggregate shares as to 

which investment discretion is shared in the 

manner desc'ribed in the preceeding instruction with any other person, and check column 

6(b). 

4. Follow the procedure described in the 

preceeding instruction for reporting instance 

in which investment discretion is shared in a 

manner other than that described in 2 above 

(a 6(c) response). 

ltem 7. The reporting Manager shall identify 

those other Managers on whose behalf this 

report is being filed in this column by filling 

in the number assigned to such Manager on 

the cover page (not its name or 13F file number). This number shall appear, in this 

column, opposite the segregated responses 

to ltems 4, 5 and 8 (and the relevant indication of shared discretion set forth in ltem 6) 

as required by the preceding instruction. No 

other names or numbers should be placed in 

ltem 7. 

ltem 8. The Manager shall report the number of shares for which the Manager exercises sole, shared, or no voting authority. 

Where the Manager exercises sole voting 

authority over specified "routine" matters 

and no authority to vote in "non-routine" 

issues, it is deemed for this report to have no 

24lSEC DOCKET 
a change in the articles of incorporation af shared, but rather as sole. 

fecting the rights of shareholders or a change 

in fundamental investment policy; while 

"routine" issues would include selection of Column Totals. The Manager shall 

an accountant, uncontested election of direc- column total for ltem 4 only. A total s

tors, or approval of an annual report. If voting given for each page and an aggregate 

authority is shared only in a manner similar the end of the report. 

FORM 13F 

INFORMAT ION REQUIRED OF INSTITUTIONAL INVESTMENT 

MANAGERS PURSUANT TO SECTION 13(f) OF THE SECURITIES 

EXCHANGE ACT OF 1934 AND RULES THEREUNDER 

Securities end Exchange Commission 

Washington, D.C. 20549 

Rport for the Calendar Year Ended 	 I?-

(Please read instructions before re paring form) 

If mandeE. report check hem: r/ 


kw of I~titutlx!al Innatment thPlg.rr 


I.w,Pbona Bo., .IldTitla ot Pam Duly Autborizad ta Subit IbL. Report: 

m C N -	Intentiaml misstatemnts or anissicns cb fw constitute F'ederal 

Criminal violations. See 18 U.S.C. 1001 15 U.S.C. 78ffCa). 

'Ihc iratitutic~l inveswnt mmwr submitting this Form ard its atta&- 

mnta ad the prsm by whcn it is signed represent here@ that all infomtim 

wntained therein is true, correct ard cxrplete. It is understood that all 

required item, statanents ard schedules are ansidered integral parts of this 

Fom ard that the submissim of any mrdmnt reoresent5 that all unanerded 

item, statenents ard schecbles remin true, correct a& wnplete as prwicusly 

NtYnttted. 

Fumuant to the requimmnts of Securities Exchange Act of 1934, the 

ondersigned institutional investmnt narnger has mused this reprt to be 

8igne.d on its behalf in the City of and State of 

on the day of 	 . 19. 

lmruai Signature of Person ~ulyAuthorized 

b SWt We Faport) 

I.u aud 13F film numbera of A3 Institutional Investment haeers vith 3spect 

b which this schedule is filed (other than tta one fillnn thin revert) 

(Urt in alphabatleal order). 

IjP Pila Pumbers vlll be assigned to kratitutld hrhrnt Jbnapn after 

tb.~tila th.1~ first Toport. 

Name: 13F Filt No.: Namc: 	 13F Filc No.: 

7. 14. - - ---- ...a*. PI.. 

Form continues on following page 

8nC-1685 

SEC D