Names like Paulson, Einhorn, Druckenmiller, Bacon, Tudor Jones and Soros could all see an added layer of opacity to their holdings as a result of the SEC's proposal to limit Form 13F filers to those who hold stakes of $3.5 billion or more. Even Ray Dalio, who manages $138 billion, could see added opacity to his holdings as a result of the rule. His firm holds only $5 billion in stocks.
The current threshold for Form 13F filers is $100 million and the value of most of these firms' holdings in the U.S. is less than the proposed $3.5 billion threshold requirement.
Even Paul Singer's Elliot Management could wind up going dark, as his firm has only about $3.4 billion in stocks and and convertible bonds and another $2 billion in equities, according to Bloomberg. Managers like Leon Cooperman have said that it would be nice to reduce the regulatory burden required for the current threshold.
NIRI spokesman Ted Allen thinks the new rule is a compromise for managers in exchange for requiring more timely 13F reports and a potential rule change that would require firms to disclose their short positions.
Allen said: "If this rule goes through, you will see more small and mid-sized companies getting ambushed by hedge funds. This will increase activism in all of the mid-cap companies because there will be less transparency."
Andrew Park, a senior policy analyst at Americans for Financial Reform, has concerns about the new requirement: "I'm certain you could see firms that want to cap at $3.5 billion. There's a pretty stark difference of having $3.49 billion versus $3.51 billion given these reporting requirements."