SEC Proposes Modernization to Process for Applications

SEC Proposes Modernization to Process for Applications

On November 4, 2021, the SEC released a rule proposal that would modernize certain filings submitted via the Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system, including applications for exemptive orders under the Advisers Act and requests for confidential treatment of Form 13F.

13F Confidential Treatment Requests

The proposal would amend Form 13F and related rules under the Exchange Act and Regulation S-T to require that managers file requests for confidential treatment electronically via EDGAR. Consequently, the 13F Confidential Treatment Requests that filers currently submit to the Commission in paper, typically through the mail or by express delivery, would be required to be submitted electronically via EDGAR. The request for confidential treatment of 13F would be made as a separate, non-public filing. Requests also would include a confidential Form 13F report that is limited to the 13F Securities holdings for which the manager was requesting confidential treatment.

Under the proposed rule, managers would be required to submit an updated Form 13F at the expiration of the time period for which the manager requested confidential treatment or earlier (e.g., upon the denial of the 13F Confidential Treatment Request). Managers would also be required to identify on the Summary Page if confidential treatment was being requested for some or all of the manager’s holdings for the quarter-end period. The change is designed to allow the SEC and the public to identify whether a manager had omitted some or all of its holdings.

Other Amendments to Form 13F

The SEC also re-proposed minor amendments to Form 13F that would require filers to include their CRD and SEC file numbers, if any, in their identifying information. In addition, proposed technical changes would modify the rounding convention for the value of securities reported — filers would report the value of shares to the nearest dollar rather than the nearest $1000, as currently required.

Exemptive Orders under the Advisers Act

The proposed rule modernizes the process for submitting applications for exemptive orders under the Advisers Act by requiring that they be filed electronically through EDGAR. This follows a similar 2008 rule change that required electronically filing applications for exemptive orders under the Investment Company Act.

Currently, an applicant seeking Investment Company Act relief submits its application electronically to the Commission via EDGAR, while an applicant seeking Advisers Act relief submits its application, as well as a proposed notice of application, in paper and in quintuplicate. The harmonization would allow filers to submit a single joint application through EDGAR for exemptive orders under both Acts.

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