13F investment discretion: SOLE, DFND, OTR
13F investment discretion is what Column 6 of the Information Table records: whether the filing manager decided alone to hold a security, or shared that decision with someone else. It is a three-value field, SOLE, DFND or OTR, and it is the reason the same block of shares can legitimately appear on two different Form 13F filings in the same quarter. This guide explains the three codes, how they pair with Column 7, and the double-counting trap they create. It is not investment advice.
Definition
13F investment discretion
is Column 6 of the Form 13F Information Table. It marks each holding SOLE where the manager decides alone, DFND where discretion is shared inside a defined relationship such as a parent and subsidiary, or OTR where it is shared in any other way. Source: SEC, Form 13F.
What do the three 13F investment discretion codes mean?
The SEC asks managers to segregate holdings of a class by the nature of the discretion held, and to enter one of three designations.
| Code | Designation | When it applies |
|---|---|---|
| SOLE | Sole | The manager exercised sole investment discretion over the securities |
| DFND | Shared-defined | Discretion shared with controlling and controlled companies, an adviser and the funds it advises, or an insurer and its separate accounts |
| OTR | Shared-other | Discretion shared in any manner other than the defined relationships above |
Sole holdings go on one line. For DFND and OTR, the manager splits the holding into two categories on separate lines: securities shared with another manager on whose behalf the report is being filed, and securities shared with anyone else.
How Column 6 and Column 7 work together
Column 7, Other Managers, carries the number assigned to each other manager in the List of Other Included Managers on the Cover Page. It is entered opposite the segregated entries in Columns 4, 5 and 8, so a reader can tell which affiliate the discretion is shared with. The instruction is strict: no other names or numbers belong in that column, and the conditions of sharing must be reported consistently for every holding on a single line.
3 codes
Investment-discretion values allowed in Column 6 of the 13F Information Table: SOLE, DFND and OTR
Source: SEC, Form 13F Special Instruction 11.b.vi
The double-counting trap
Because shared discretion is reported by more than one manager, summing every 13F across a fund group inflates the group's holdings. A large asset manager that files for several advisory subsidiaries may report the same shares on a parent filing and on a subsidiary filing, distinguished only by Column 6 and Column 7. This is also why the 13F-NT notice report exists: a manager whose holdings are reported entirely by someone else files a notice rather than a second copy of the table.
One nuance is worth stating plainly. A manager is deemed to share discretion for every account over which a person under its control exercises discretion. But a manager of an institutional account, such as a pension fund or an investment company, is not deemed to share discretion with that institution unless the institution actually participated in the investment decision.
Where this sits in the filing
Column 6 is one of the eight fields in the 13F Information Table. Its neighbour, Column 8, records who votes the shares: see 13F voting authority. For the filing itself and the 45-day deadline, see what is a 13F filing.
Flock reads the discretion and other-manager columns when it decodes a 13F-HR, so an affiliated group's holdings are not counted twice. Every position stays linked to the filing it came from. What it means for your money is your call to make.
Frequently asked questions
What do SOLE, DFND and OTR mean on a 13F?
They are the three investment-discretion codes in Column 6. SOLE means the manager alone decides. DFND is shared discretion within a defined relationship, such as a holding company and its subsidiaries. OTR is discretion shared in any other way. Source: SEC, Form 13F Special Instruction 11.b.vi.
Can two managers report the same shares on Form 13F?
Yes. Where discretion is shared, the same holding can appear on more than one manager's Form 13F. Adding up filings across an affiliated group without checking Column 6 and Column 7 therefore double counts the position. Source: SEC, Form 13F.
What goes in Column 7, Other Managers?
The number assigned to each other manager on whose behalf the report is filed and with whom discretion is shared for that holding. It is a cross-reference to the List of Other Included Managers, and no other names or numbers may be entered. Source: SEC, Form 13F Special Instruction 11.b.vii.
Is a pension fund's manager deemed to share discretion?
Not automatically. A manager of an institutional account such as a pension fund or investment company is not deemed to share discretion with that institution unless the institution actually took part in the investment decision. Source: SEC, Form 13F.
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Disclosures shown are public regulatory filings. Data may be delayed or incomplete. Smart-money entities may no longer hold positions shown. Not investment advice.