SEC adopts amendments to beneficial ownership reporting rules
On October 10, 2023, the SEC adopted rule amendments to modernize beneficial ownership reporting under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934. Sections 13(d) and 13(g), along with Regulation 13D-G, require an investor who beneficially owns more than 5% of a covered class of equity securities to publicly file either a Schedule 13D or a Schedule 13G, as applicable. An investor with control intent files Schedule 13D, while exempt investors and investors without a control intent, including qualified institutional investors and passive investors, file Schedule 13G.
- For Schedule 13D filers, the initial filing deadline has been shortened from 10 days to five business days. Amendments must be filed within two business days.
- For certain Schedule 13G filers (i.e., qualified institutional investors and exempt investors), the initial filing deadline has been shortened from 45 days after the end of a calendar year to 45 days after the end of the calendar quarter in which the investor beneficially owns more than 5% of the covered class. For other Schedule 13G filers (i.e., passive investors), the initial filing deadline has been shortened from 10 days to five business days.
- All Schedule 13G filers are generally required to file an amendment 45 days after the calendar quarter in which a material change occurred rather than 45 days after the calendar year in which any change occurred.
- All Schedule 13D and 13G filings must be made using an XML-based language. HTML or ASCII language will no longer be permitted.
- Qualified institutional investors and passive investors should also be aware of accelerated amendment obligations when their beneficial ownership (i) exceeds 10% or (ii) increases or decreases by 5% or more. In such cases, the initial filing deadline is now within five business days after the end of the month in which the threshold was exceeded.
You can read more about this topic by downloading the SEC Fact Sheet: Modernization of Beneficial Ownership Reporting.
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