The Securities and Exchange Commission (SEC) recently adopted the final rule amendments governing beneficial ownership reporting under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934. I first blogged about this in May of 2022. That’s when the SEC initially proposed these amendments, which would be the first major update to this reporting since November 2021.
More than a year later, the amendments for the Modernization of Beneficial Ownership Reporting are now final, and market participants must get ready to provide more timely information on their positions to meet the needs of investors in today’s financial markets. Here are the facts you need to know:
- An investor who beneficially owns more than five percent of a covered class of equity securities must publicly file either a Schedule 13D or a Schedule 13G, as applicable.
- An investor with control intent needs to file a Schedule 13D.
- Exempt investors and those without control intent, such as Qualified Institutional Investors and Passive Investors, must file a Schedule 13G.
- The deadline for initial Schedule 13D filings will be reduced from 10 business days to five business days.
- Schedule 13D amendments will need to be filed within two business days.
- The filing deadlines for Schedule 13G beneficial ownership reports will be accelerated. The deadlines will differ based on the type of filer.
- Schedule 13D disclosure requirements must be clarified with respect to derivative securities.
- All Schedule 13D and 13G filings must use structured, machine-readable data language (XML).
- The filing “cut-off” times in Regulation S-T for Schedules 13D and 13G will be extended from 5:30 p.m. to 10:00 p.m. Eastern Time.
- September 30, 2024: Compliance with the revised Schedule 13G filing will be required.
- December 18, 2024: Compliance with the structured data (XML) requirement for Schedules 13D and 13G will be required.
- December 18, 2023: Beneficial owners may begin to voluntarily comply with the structured data requirements.
- Compliance with the other rule amendments will be required upon their effectiveness.
The SEC has yet to release any technical specifications for these forms. As always, we recommend checking this site regularly for any updates on these specifications as well as other SEC-related news. As for those who still have questions, feel free to contact the DFIN team. We are available to answer all your questions.