Large Trader: Definition, How It Works, and Key Considerations

What is a large trader?

A large trader is an investor or organization whose trades in National Market System (NMS) securities meet or exceed SEC-established thresholds. The Securities and Exchange Commission (SEC) defines a large trader as any person whose transactions in NMS securities equal or exceed:

• 2 million shares or $20 million during any calendar day, or
• 20 million shares or $200 million during any calendar month.

Large traders must identify themselves to the SEC by registering on Form 13H.

Why the SEC requires large trader reporting

Large trader reporting gives the SEC visibility into market participants whose activity can meaningfully move prices or affect market stability. The program helps the SEC:

• Analyze causes of trading volatility.
• Detect potential market abuses (for example, manipulation or insider trading).
• Support investigations and enforcement actions.

The reporting framework grew from concerns about rising automated and high-volume trading and is rooted in legislative and regulatory reforms beginning with the Market Reform Act of 1990. The current registration requirement has been in place since 2011.

How registration and identification work

• Form 13H: Any entity that meets the large-trader thresholds must file Form 13H, “Large Trader Registration,” with the SEC. An initial filing is required, followed by an annual filing each calendar year. Quarterly updates may be submitted if information changes.
• Large Trader Identification Number (LTID): The SEC assigns each registered large trader an LTID. The large trader must provide its LTID to its broker-dealers and identify which accounts the LTID covers.
• Inactive status and termination: A registrant that ceases to meet the thresholds may file for inactive status and remain exempt from ongoing reporting until it again meets the thresholds. To stop being a registered large trader, a registrant must report termination on Form 13H during the next filing period.

Broker-dealer obligations

Broker-dealers that carry accounts for large traders have specific recordkeeping and reporting duties:

• Maintain records of clients’ LTIDs and executed transaction times.
• Monitor client accounts for activity that would trigger large-trader reporting.
• Report transactions by large traders that meet or exceed the activity thresholds.
• Provide transaction details to the SEC when requested, typically via the Electronic Blue Sheets (EBS) system.

Purpose in examinations and enforcement

The SEC uses the data gathered from Form 13H registrations and EBS transaction reports to:

• Reconstruct trading activity during periods of market stress or volatility.
• Identify suspicious patterns consistent with market manipulation or insider trading.
• Support examinations of broker-dealers and investment advisers for compliance with regulatory obligations.

Who typically qualifies as a large trader?

Large traders are generally professional and institutional market participants, including:

• Mutual funds and pension funds
• Hedge funds and proprietary trading firms
• Banks and broker-dealers
• Insurance companies
• High-frequency trading firms (when activity meets thresholds)

Key takeaways

• A large trader is defined by SEC thresholds: 2 million shares or $20 million in one day, or 20 million shares or $200 million in one month, in NMS securities.
• Registration via Form 13H and an assigned LTID are required for entities that meet those thresholds.
• Broker-dealers must keep LTID records, monitor accounts, and report qualifying transactions; the SEC may request detailed transaction data through EBS.
• The reporting program helps the SEC analyze market volatility, detect abusive trading, and support enforcement.

Regulatory basis

Reporting and registration requirements for large traders are established and implemented by the SEC under rules governing large trader reporting and related examinations and enforcement activities.