SEC Proposes Electronic Disclosure
The Securities and Exchange Commission has proposed a technical rule change that would require Warren Buffett and other big investors to post quarterly reports of their stock holdings via the Internet.
Under the proposal, money managers such as Buffett, George Soros and Michael Price would be required to use the SEC’s electronic filing system to submit disclosure statements known as Form 13Fs. Investment advisors have traditionally filed the form--which lists the stocks held by their investment funds at the end of each quarter--on paper.
The disclosure statements would be much more accessible under the new rule because investors could tap into the SEC’s electronic filing system on the Internet. And investors could use the online filings to figure out which stocks are popular with experts such as Buffett and Soros.
“It becomes much easier to see where certain fund managers are going, what they are getting into and what they may be getting out of,” said David Copenhafer, a director in the SEC’s office of information technology. “It’s very interesting information.”
It can be very sensitive information as well. Stocks often move after Buffett’s 13F filings disclose even slight adjustments to the portfolio the billionaire controls through Berkshire Hathaway Inc., his Omaha-based holding company.
For example, Berkshire disclosed in a May 19 filing that it sold about 300,000 common shares in Wells Fargo & Co. during the first quarter of this year. Wells Fargo shares fell about 5% that day.
Extracting such information from 13Fs takes some work. Investors must compare the latest 13F with the previous filing to determine how money managers have changed their stakes.
Simply getting this information is difficult because it isn’t widely disseminated. Paper documents can only be obtained by going to SEC offices in person or by paying private service bureaus to retrieve the filings.
The SEC requires most companies to submit documents through its Electronic Data Gathering, Analysis and Retrieval system, better known as Edgar. However, the agency accepted 13F filings on paper because the SEC lacked the software that would help investment managers submit the information electronically, Copenhafer said.
As a result, only about 5% of the 1,800 money managers who must file 13Fs do so electronically, the SEC says. The filing requirement covers institutional investment managers who handle accounts holding at least $100 million of certain equity securities.
