SEC Needs to Make Form 13F Filings Available in XML

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Rant time.

How does the SEC not have a program in place to adequately deal with Form 13F filings? Why aren't these files available in XML format so that they can easily be accessed by investors and investigators?

As it stands right now, the Form 13F filings are just a non-standardized mishmash of jumbled (and often inaccurate) information. Seriously - have fun going through these filings if you are doing any type of serious research. I guarantee you that you will have a migraine headache when you are done. In addition, you will very likely notice GLARING errors staring back at you from the pages of the reports.

Note: a Form 13F filing is made by "institutional investment managers that exercise discretion with respect to accounts holding certain equity securities having an aggregate fair market value of $100 million or more." Form 13F reports must be filed within 45 days of the last day of each quarter.

Berkshire Hathaway, SAC Capital and Paulson & Co. Inc. are just a few of the firms who must file Form 13F reports.

A Form 13F report will list all of the Section 13(f) securities that an institution holds at the end of a given quarter. For instance, if Berkshire Hathaway owns 50,000 shares of XYZ at the end of the third quarter, then the Q3 13F filing from Berkshire will list that position.

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The Office of Inspector General at the Securities and Exchange Commission actually released a review of the SEC's Section 13(f) reporting requirements in September of 2010.

Here is what the report revealed:

-despite the fact that Form 13F filings were meant to help the SEC for regulatory and oversight purposes, the SEC "conducts no continuous or systematic review or analysis of the Form 13F reports"

-forms are frequently uploaded with errors because there is no mechanism in which the SEC can catch errors

-the current system of institutions simply uploading text files "limits the usefulness" of the Form 13F filing

The report also reveals that discussions were held in 2005 about the possibility of "modernizing the format of Form 13F" by changing the text file format to "a more structured format that would use an Extensible Markup Language (XML)".

This project was not pursued because former Chairman Christopher Cox had "other priorities". The report also revealed that the switch to XML "would not have been very costly".

Note: XML is used in other types of SEC filings, such as insider filings.

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According to the WSJ, the SEC recently revealed that they would be "scrutinizing hedge funds that consistently offer above-market returns amid concern about whether outsized returns are a result of malfeasance".

Wouldn't making Form 13F filings more accurate and easy-to-use (especially for SEC agents) be a good first step in this process?