The Securities and Exchange Commission’s newly enacted Rule 13h-1 requires “large traders” to register to be assigned an identification number that will allow tracking of its transactions, starting today.

If a firm or an individual meets the SEC’s definition, in trading today or hereafter, the firm has 10 days to file Form 13H, a Web form.

Rule 13h-1(a)(1) defines a large trader as:

Any person or organization that directly or indirectly controlsaggregate transactions in National Market System securities that are equal to or greater than: (1) during a calendar day, either two million shares or shares with a fair market value of $20 million; or (2) during a calendar month, either 20 million shares or shares with a fair market value of $200 million.

The scope of the term “large trader” is broad, encompassing individuals and entities, including non-U.S. entities, who engage in National Market System, notes the law firm of Kavanagh, Maloney & Osnato, in its summary of the impact of the rules.

Once form 13H is filed, the SEC will send a large trader a “large trader identification number.’’ That number then must be provided to all of its U.S. registered broker-dealers and the large trader must identify for them each account to which the LTID applies.

Friday, the Commodity Futures Trading Commission’s Division of Market Oversight also issued a letter to market participants requiring compliance with the new large trader reporting system for physical commodity swaps and swaptions.

Clearing organizations and clearing members must begin reporting under the new system today and the Division requires fully compliant month-end open interest reports to be collected beginning September 2011 through February 2012 and submitted to the Commission by March 20, 2012.

Here is a copy of Form 13H.

Here are the SEC’s Large Trader Reporting Rules.

-- This article first appeared on Securities Technology Monitor.




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