U.S. Securities and Exchange Commission Adopts Amendments to Beneficial Ownership Reporting Rules
2024-09-24 10:32:01
On October 10, 2023, the U.S. Securities and Exchange Commission (SEC) adopted amendments to the beneficial ownership reporting rules under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 ("Exchange Act"), which apply to beneficial owners holding a certain percentage of equity in public companies.
Sections 13(d) and 13(g) of the Exchange Act and related regulations require any beneficial owner of more than 5% of a class of voting equity securities registered under Section 12 of the Exchange Act ("covered securities") to publicly file a Schedule 13D or Schedule 13G to report such beneficial ownership and certain changes in ownership. The adopted amendments include, among other things:
Shortening the filing deadlines for Schedules 13D and 13G;
Explicitly setting the filing deadline for amendments to Schedule 13D;
Introducing more frequent amendments to Schedule 13G; and
Extending the filing deadline for Schedules 13D and 13G to 10:00 p.m. Eastern Time, instead of the current 5:30 p.m. Eastern Time.
Below is a summary of the key changes to filing deadlines:
Schedule 13D:
The initial Schedule 13D filing deadline has been shortened from 10 calendar days to 5 business days after acquiring beneficial ownership of more than 5% of the covered securities.
The deadline for filing amendments to Schedule 13D has been revised from "promptly" to 2 business days after a material change occurs.
Schedule 13G:
For qualified institutional investors and exempt investors, the initial Schedule 13G filing deadline has been revised from 45 days after the end of the calendar year in which the beneficial ownership exceeds 5% of the covered securities to 45 days after the end of the calendar quarter in which the threshold is crossed.
For passive investors, the initial Schedule 13G filing deadline has been shortened from 10 calendar days to 5 business days after acquiring beneficial ownership of more than 5% of the covered securities.
The general deadline for filing amendments to Schedule 13G has been revised from 45 days after the end of the calendar year in which any change occurs to 45 days after the end of the calendar quarter in which a material change occurs.
For exempt investors, the deadline for filing amendments to Schedule 13G has been revised from 10 calendar days after the end of the month in which beneficial ownership exceeds 10% of the covered securities to 5 business days after the end of the month in which the threshold is crossed, and also when there is any increase or decrease of more than 5% in beneficial ownership of the covered securities.
The adopted amendments will become effective 90 days after the new rules are published in the Federal Register. However, the new Schedule 13G filing deadlines will take effect on September 30, 2024.
[1] The full text of the amendments can be found at the following link: https://www.sec.gov/files/rules/final/2023/33-11253.pdf.