13F Confidential Treatment: The SEC Loophole That Hides Holdings

Every quarter, thousands of institutional managers file Form 13F with the SEC, and retail investors treat it as a complete snapshot of what the smart money owns. It usually is. But a real, legally sanctioned gap exists in that picture: 13F confidential treatmentlets certain managers ask the SEC for permission to leave specific positions out of their public filing entirely, then reveal them months later once the strategy is no longer live. Berkshire Hathaway has used this mechanism repeatedly over the past 25 years, and it isn’t alone.

MarketPeel has already covered how to read a standard Form 13F filing and how to spot crowded 13F trades. This post goes one layer deeper into a gap those posts don’t address: the legal mechanism that lets a 13F be incomplete on purpose, how often the SEC actually grants it, and what happens to the stocks managers choose to hide.

What a 13F Filing Doesn’t Always Show You

Form 13F is presented, and generally functions, as a complete quarterly record of an institutional manager’s U.S. long equity positions. Any manager exercising discretion over $100 million or more in Section 13(f) securities must file one on EDGAR within 45 days of each quarter’s end. That much is a given.

What most retail investors don’t realize is that the SEC itself builds an exit into that disclosure requirement. The official Form 13F instructions include an entire section titled “Instructions for Confidential Treatment Requests,” describing how a manager can omit a holding from the public filing and submit it separately, out of public view. A manager doing this still files a public 13F by the standard deadline—it just doesn’t include everything. The public filing even checks a box disclosing that some information has been withheld, but it doesn’t say what, or how much.

Rule 24b-2: The Legal Basis for Confidential Treatment

The mechanism has a name: SEC Rule 24b-2, codified at 17 CFR 240.24b-2 under the Securities Exchange Act. It authorizes any filer, not just 13F managers, to request that specific information in an SEC filing be withheld from public disclosure. For Form 13F specifically, a manager applying for confidential treatment has to provide a factual basis tied to a Freedom of Information Act exemption, almost always FOIA Exemption 4, which protects trade secrets and confidential commercial or financial information.

Two categories of holdings are eligible by statute: positions that would identify securities held in the account of a natural person, and certain estates or trusts. Beyond that, the SEC recognizes two additional categories through its own guidance: an ongoing acquisition or disposition program—a manager still actively building or unwinding a position—and open risk arbitrage or block positioning strategies. For an ongoing program, the manager has to show the plan is detailed, specific, still in progress as of the filing date, and that disclosing it would cause substantial competitive harm. A 2013 SEC staff guidance update spells out exactly what that showing needs to include: how far the program has progressed, why the 13F data itself would reveal the strategy, and a demonstration that the harm from disclosure would be substantial, not just inconvenient.

Confidential treatment also isn’t indefinite. Per the official Form 13F instructions, a grant of confidentiality generally cannot exceed one year from the date the manager was required to file that 13F. When the period expires, the manager must either file a fresh, substantiated request at least 14 days beforehand or amend its public filing within 6 business days to disclose the previously hidden holding. That built-in expiration is what eventually surfaces positions like Berkshire’s Chevron and Verizon stakes—confidentiality is a delay mechanism, not a permanent shield.

How a Confidential Treatment Request Actually Works

In practice, a manager seeking confidential treatment files two things at once: a public Form 13F that omits the sensitive holding, and a separate confidential 13F reportcovering that holding, both submitted through EDGAR. The public filing’s Summary Page carries a checkbox confirming that confidential information has been omitted and filed separately—so the existence of a hidden position is technically disclosed, even though its identity is not.

The process has gotten stricter over time, not looser. As of February 28, 2023, confidential treatment requests and their supporting letters must be filed electronically via EDGAR, ending a decades-old paper-based, overnight-courier process. The same wave of amendments, effective January 3, 2023, also required managers to disclose their CRD and SEC file numbers on the public form and rounded dollar values in the holdings table to the nearest dollar instead of the nearest $1,000—changes aimed at making the public side of 13F reporting more precise, even as the confidential side stayed legally intact.

Real Example: Berkshire Hathaway’s Confidential Filings

No manager illustrates this mechanism better than Berkshire Hathaway, largely because its size and visibility mean every confidential position eventually gets scrutinized once it surfaces. The history goes back further than most investors assume.

Per reporting on the 2025 filing, Berkshire’s confidential requests have historically covered sizable purchases the company was still accumulating and didn’t want copycat buyers front-running. That’s the practical logic behind nearly every confidential treatment request: disclosing a large, in-progress purchase invites other market participants to buy ahead of you, pushing the price up before you’re done building the position.

How Often the SEC Grants These Requests

This isn’t a rare or fringe use of the rule. A Freedom of Information Act request obtained by Institutional Investor showed the SEC’s approval rate held steady around 85% through the early 2010s.

That approval rate has drawn criticism from securities law academics and investor advocates. Columbia Law School professor John Coffee argued the SEC should “be embarrassed” about how liberally it grants confidential treatment while directing enforcement resources elsewhere. The AFL-CIO’s Heather Slavkin Corzo put the retail-investor concern more bluntly: the practice feeds the sentiment that “there are two sets of rules.”

What the Academic Research Says About Hidden Holdings

The most useful data point for retail investors isn’t the approval rate, it’s what happens to the stocks managers choose to hide. A widely cited study, “Uncovering Hedge Fund Skill from the Portfolio Holdings They Hide” by Agarwal, Jiang, Tang, and Yang (published in the Journal of Finance, 2013), examined institutional managers’ confidential Form 13F holdings and found that confidentially held positions significantly outperform the same managers’ disclosed holdings over the following twelve months.

The study also finds that private information, not administrative convenience, is the dominant motive behind confidentiality requests. Funds running large, riskier, non-conventional strategies request confidential treatment more often, and the probability the SEC approves a request correlates with how much of the fund’s portfolio the confidentiality covers and the filer’s historical track record.

Who Actually Uses Confidential Treatment

Berkshire Hathaway gets the attention because of its size and Warren Buffett’s profile, but confidential treatment isn’t unique to one company. Any eligible institutional manager can apply, and the categories the SEC recognizes point directly at who tends to use it: funds running an active accumulation or disposition program in a stock, funds holding open risk arbitrage positions around a pending merger, and funds executing large block trades that would move the market if disclosed prematurely.

The practical reason is consistent across all of them: a large position is hard to build without moving the price, and a visible 13F filing showing that accumulation in progress invites other traders to buy ahead of the fund and drive the price up before the fund finishes. Confidential treatment buys time to finish accumulating (or unwinding) a position before the rest of the market can react to it.

Risk arbitrage funds are a good illustration of why the SEC carved out a separate, lighter-touch category for them. A fund holding a position in a company that’s the target of a pending merger, betting on the deal closing, doesn’t need to build the same detailed factual case an ongoing accumulation program requires. If the manager can represent in good faith that the position was still open at quarter-end and might not close before the 13F filing deadline, the SEC automatically grants confidential treatment for up to a year. That lower bar reflects a simple reality: disclosing an open arbitrage position publicly can attract other traders into the same spread, compressing the very return the arbitrageur is trying to capture.

What This Means for Reading 13F Data Today

None of this means 13F data is unreliable. It means it should be read as a lagging, sometimes incomplete signal layer, not a live or exhaustive one. A fund’s 13F showing its full reported portfolio at quarter-end may still be missing pieces the manager has chosen, with SEC approval, to keep out of view. A sudden “new” position that appears in a later quarter’s filing may not be new at all—it may be an old confidential stake that has simply finished its window of protection and become public.

For a retail investor using 13F data to track institutional conviction, the practical adjustment is modest but real: treat gaps and abrupt additions as a normal feature of the disclosure regime, not a red flag or a mistake in the data. And when a position does surface after being confidential, that history itself is informative—research suggests the manager considered it valuable enough to actively protect.