Although the SEC has given a temporary pass to broker-dealers on complying with Rule 13h-1, the Large Trader Rule, advisors must still comply if they qualify, which could mean more paperwork, depending on how they handle client securities.
The new rule is intended to track large traders—any person or entity with discretion directly or indirectly to effect the trade in an account, to the tune of 2 million shares or $20 million per day, or 20 million shares or $200 million per month.
That means, according to Jesse Lawrence, managing director and senior managing counsel at Pershing, that if you as an advisor are making investment decisions or trades in that amount for clients, even if through separately managed accounts, you are required to register.
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