The U.S. Securities and Exchange Commission (SEC) has proposed amendments to a rule governing beneficial ownership to provide more timely information.
The proposed amendments to Regulation 13D-G would accelerate the filing deadlines for Schedules 13D beneficial ownership reports from 10 days to five days.
It would also require that amendments be filed within one business day; accelerate the filing deadlines for Schedule 13G beneficial ownership reports; expand the application of Regulation 13D-G to certain derivative securities; clarify the circumstances under which two or more persons have formed a “group” that would be subject to beneficial ownership reporting obligations; provide new exemptions to permit certain persons to communicate and consult with one another, jointly engage issuers, and execute certain transactions without being subject to regulation as a “group;” and require that Schedules 13D and 13G be filed using a structured, machine-readable data language.
“These amendments would update our reporting requirements for modern markets, reduce information asymmetries, and address the timeliness of Schedule 13D and 13G filings,” SEC Chair Gary Gensler said. “Investors currently can withhold market moving information from other shareholders for 10 days after crossing the 5 percent threshold before filing a Schedule 13D, which creates an information asymmetry between these investors and other shareholders. The filing of Schedule 13D can have a material impact on a company’s share price, so it is important that shareholders get that information sooner. The proposed amendments also would clarify when and how certain derivatives acquired with control intent count towards the 5 percent threshold, clarify group formation, and create related exemptions.”
The public comment period will remain open for 60 days following publication on the SEC’s website or 30 days following publication in the Federal Register, whichever period is longer.