# SEC Form 13F Explained: Filing Requirements, Insights, and Common Issues

![SEC Form 13F: A quarterly report that must be filed by all institutional investment managers with at least $100 million in assets under management.](https://www.investopedia.com/thmb/Eyr4c6f05iQ3CDP6h6lloclAV5w=/1500x0/filters:no_upscale():max_bytes(150000):strip_icc()/form-13f.asp-final-3b25006f51bf4e88aa99044882e66252.jpg)

*— Investopedia / Jake Shi*

## What Is SEC Form 13F?

The SEC Form 13F is a crucial component for maintaining transparency in financial markets. Required for institutional managers with at least $100 million in assets under management, this quarterly filing offers a glimpse into the holdings and strategies of major players on Wall Street. Despite its regulatory importance, the form has faced criticism for issues related to data reliability and reporting timeliness, which can complicate its use for investors seeking to replicate top managers' strategies.

### Key Takeaways

*   SEC Form 13F is a quarterly report that institutional investment managers must file if they manage $100 million or more in assets.
*   The form aims to bring transparency to the holdings of large U.S. investors but has been criticized for problems with data reliability and timeliness.
*   Institutional investors only report long positions in their 13F filings, potentially misleading other investors who seek to emulate their strategies.
*   Due to the 45-day reporting delay, the data on Form 13F may be outdated, affecting its usefulness for smaller investors.
*   Critics suggest that the reporting requirements of Form 13F could benefit from updates to enhance accuracy and usefulness.

## How SEC Form 13F Enhances Financial Transparency

Congress created the 13F requirement in 1975. Its intention was to provide the U.S. public with a view of the [holdings of the nation's largest institutional investors](https://www.investopedia.com/ask/answers/07/institutional_holdings.asp). Lawmakers believed this would increase investor confidence in the integrity of the nation's financial markets.

Firms that are considered institutional investment managers include mutual funds, hedge funds, trust companies, pension funds, insurance companies, and [registered investment advisors](https://www.investopedia.com/terms/r/ria.asp).

Form 13F filings reveal the holdings of Wall Street's top stock pickers, so many smaller investors use these as guides for their strategies. They believe the largest investors are savvy and influential in moving markets, so mimicking their investments seems sensible.

## Challenges and Limitations of SEC Form 13F

Smaller investors who want to replicate the strategies of rock star money managers like Daniel Loeb, [David Tepper](https://www.investopedia.com/terms/d/david-tepper.asp), or Seth Klarman scrutinize 13F filings. The financial press often reports on what these fund managers have been buying and selling by comparing changes in quarterly filings. But there are a number of problems with 13F filings that warrant caution.

### Data Reliability Concerns in SEC Form 13F

13F has drawn criticism from many groups who claim it provides a loophole for hedge fund managers. In a 2010 statement, the SEC admitted the form had issues and recommended changes to ensure "useful and reliable data" for the public and regulators.

The SEC's internal review also noted that although "the SEC would be expected to make extensive use of Section 13(f) information for regulatory and oversight purposes, no SEC division or office conducts any regular or systematic review of the data filed on Form 13F."

This might explain how fraudster [Bernard Madoff](https://www.investopedia.com/terms/b/bernard-madoff.asp) filed 13F forms each quarter yet ran a Ponzi scheme successfully.

### Reporting Timelines and Their Impact on Investors

Another frequent criticism of the form is the fact that it only requires fund managers to file 13F reports 45 days after the end of each quarter. Most managers submit their 13Fs as late as possible because they do not want to tip off rivals to what they are doing. By the time other investors get their hands on those 13Fs, they are looking at stock purchases that may have been made more than four months prior to the filing.

In a March 31, 2021 letter to Allison Herren Lee, the acting [chair of the SEC](https://www.investopedia.com/who-is-gary-gensler-5095448), the progressive nonprofit Americans for Financial Reform urged the SEC to "expand both the frequency of Form 13F reporting and the range of financial products required to be disclosed on this form."

Another group, the National Investor Relations Institute, recommended the SEC implement a monthly reporting of ownership positions along with a 15-day window.

### The Risks of Herd Behavior in Investment Strategies

One risk for both professional and retail investors is the [tendency of money managers](https://www.investopedia.com/terms/b/bandwagon-effect.asp) to borrow investment ideas from one another. Hedge fund managers are no more immune to behavioral biases than anyone else. After all, if you are a fund manager, it is safer to be wrong with the majority than wrong alone. This can lead to crowded trades and overvalued stocks. If small investors are late to a trade, they're likely to exit late as well.

### Limitations of SEC Form 13F in Portfolio Reporting

Another issue with 13F filings is that funds are only required to report long positions, in addition to their put and call options, [American Depositary Receipts](https://www.investopedia.com/terms/a/adr.asp) (ADRs), and convertible notes. This can give an incomplete and even misleading picture, because some funds generate most of their returns from their [short-selling](https://www.investopedia.com/terms/s/shortselling.asp), only using long positions as hedges. There is no way to distinguish these hedges from genuine long positions on 13F forms.

## Who Must File SEC Form 13F?

Institutional managers with assets under management of $100 million or more must file SEC Form 13F, disclosing their equity holdings.

## What Is the New 13F Rule?

The new 13F rule, announced by the SEC in 2022, requires filers to round the security holding values to the nearest dollar rather than the nearest thousandth dollar. It also requires that Form 13F be filed via the SEC's Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system.

## What Is the Difference Between Form 13D and Form 13F?

SEC Form 13F requires institutional managers with $100 million or more in assets to disclose their holdings. Form 13D is a beneficial owner report that has to be filed when a person or group of persons acquire more than 5% of a voting class of a company's equity securities.

## The Bottom Line

Institutional managers managing $100 million or more in assets must file SEC Form 13F quarterly, providing critical transparency into their U.S. equity holdings. This transparency aims to build investor confidence by revealing the strategies of the market's largest players.

However, the form has faced criticism due to issues like unreliable data, delayed reporting, and incomplete disclosure, which can mislead smaller investors attempting to emulate these strategies. As discussions continue regarding the improvement of its effectiveness, investors should remain aware of these limitations when considering the data.

> **Article Sources**
>
> 1.  U.S. Securities and Exchange Commission. "[Frequently Asked Questions About Form 13F](https://www.sec.gov/divisions/investment/13ffaq.htm)."
>     
> 2.  U.S. Securities and Exchange Commission. "[Review of the SEC's Section 13(f) Reporting Requirements](https://www.sec.gov/about/offices/oig/reports/audits/2010/480.pdf)," Page vii.
>     
> 3.  U.S. Securities and Exchange Commission. "[Review of the SEC's Section 13(f)'s Reporting Requirements](https://www.sec.gov/files/480.pdf)," Page vi.
>     
> 4.  Americans for Financial Reform. "[Letter to Regulators: In the Wake of Archegos, The SEC Should End 13F Loopholes](https://ourfinancialsecurity.org/2021/03/letter-to-regulators-in-the-wake-of-archegos-the-sec-should-end-13f-loopholes/)."
>     
> 5.  National Investor Relations Institute. "[The Case for 13F Reform](https://www.niri.org/NIRI/media/NIRI/Advocacy/NIRI-Case-for-13F-Reform-2019-final.pdf)," Page 2.
>     
> 6.  U.S. Securities and Exchange Commission. "[Electronic Submission of Applications for Orders Under the Advisers Act and the Investment Company Act, Confidential Treatment Requests for Filings on Form 13F, and Form ADV-NR; Amendments to Form 13F](https://www.sec.gov/files/rules/final/2022/34-95148.pdf)," Page 33.
>     
> 7.  U.S. Securities and Exchange Commission. "[Form 13F](https://www.sec.gov/pdf/form13f.pdf)," Page 1.
>     
> 8.  U.S. Securities and Exchange Commission. "[Schedules 13D and 13G](https://www.investor.gov/introduction-investing/investing-basics/glossary/schedules-13d-and-13g)."