Quick Answer
A large trader files Form 13H promptly after first crossing the identifying activity level, within 45 days after each full calendar year, and promptly following a quarter in which its filed information became inaccurate. It also discloses its identification number and each account to every registered broker-dealer effecting transactions on its behalf.
Reaching large trader status starts three duties running: a filing with the SEC, a disclosure to the firms that execute for you, and a duty to give the SEC more identifying information on request. Three separate reliefs can switch off the filing and disclosure duties, and two of them lift the other-information duty too.
When Must a Large Trader File Form 13H?
Except where the filing-requirement exception applies, each large trader files Form 13H electronically with the SEC, in accordance with the instructions in the form, at three points.
| Trigger | Deadline |
|---|---|
| First effecting aggregate transactions equal to or greater than the identifying activity level, or effecting them again after becoming inactive | Promptly |
| The end of each full calendar year | Within 45 days |
| Any information in a Form 13H filing becomes inaccurate for any reason | Promptly following the end of that calendar quarter |
Two further duties sit beside the filing.
- Disclosure of status. Each large trader discloses to the registered broker-dealers effecting transactions on its behalf its large trader identification number (LTID) and each account to which it applies. A large trader on Inactive Status must notify broker-dealers promptly after filing for reactivated status with the SEC.
- Other information. Upon request, a large trader must promptly provide additional descriptive or clarifying information that would allow the SEC to further identify the large trader and all accounts through which it effects transactions.
Exam Tip: Gotchas
- The annual filing has a date and the other two do not. The calendar-year filing runs on a 45-day clock. The first-time and the inaccuracy filings are both "promptly", with the inaccuracy filing measured from the end of the calendar quarter rather than from the day the information went stale.
- Filing the form is not the same as telling the firm. The identification number and the accounts it covers go to the broker-dealers effecting transactions on the trader's behalf, which is a separate duty from the filing itself.
When Is a Large Trader Excused From Filing?
The filing-requirement exception has three limbs.
- Compliance by a controlling person. A large trader is not required to separately comply with the identification requirements if a person who controls the large trader complies with all of the filing, disclosure and other-information requirements applicable to that large trader with respect to all of its accounts.
- Compliance by a controlled person. The same relief applies if one or more persons controlled by the large trader collectively comply with all of those requirements for all of its accounts.
- Inactive Status. A large trader that has not effected aggregate transactions at any time during the previous full calendar year in an amount equal to or greater than the identifying activity level becomes inactive upon filing a Form 13H.
- What Inactive Status buys. The inactive trader is then not required to file Form 13H or to disclose its large trader status unless and until its transactions again are equal to or greater than the identifying activity level.
- Ceasing operations. A large trader that has ceased operations may elect to become inactive by filing an amended Form 13H to indicate its terminated status.
Exam Tip: Gotchas
- Relief through a related person is all-or-nothing. The controlling or controlled person must comply with all of the requirements, and must do so with respect to all of the large trader's accounts. Partial coverage leaves the large trader filing for itself.
- Inactive Status begins with a filing, not with silence. A quiet year does not switch the status off by itself; the trader becomes inactive upon filing a Form 13H.
What Should You Check on Exam Day?
- Separate the two deadlines: 45 days after each full calendar year, and promptly for a first crossing or after a quarter in which filed information became inaccurate.
- Check the trader also told its executing broker-dealers its identification number and each account it applies to.
- For relief through a related person, confirm that person complies with all of the requirements for all of the large trader's accounts.
- Confirm Inactive Status began with a filing, not with a quiet year.
- Remember a trader that has ceased operations elects inactive status by filing an amended Form 13H showing terminated status.