Modernization of Beneficial Ownership Reporting

June 26, 2023

On February 10, 2022, the SEC proposed amendments to certain rules that govern beneficial ownership reporting. The amendments include revising filing deadlines for initial and amended reports filed on Schedules 13D and 13G, clarifying and affirming rules as applied to two or more persons that form a group under the Securities Exchange Act of 1934, and requiring submissions to be in XML format. 

The comment period for the proposal has been reopened, with comments due on or before June 27, 2023. 

Affected Rules/Forms Proposed 

• Regulation 13D-G 
• Regulation S-T

Amendments Proposed 

• Modernizing filing deadlines for initial and amended beneficial ownership reports filed on Schedules 13D and 13G. 

Schedule 13D Filings 

• Initial submissions deadline from 10 days to 5 days after the date on which a person acquires more than 5% of a covered class of equity securities. 
• Initial submissions for certain persons who forfeit their eligibility to report on Schedule 13G in lieu of Schedule 13D to 5 days after the event that causes ineligibility. 

• Amended filings would be due to 1 business day after the date on which a material change occurs. 

Schedule 13G Filings 

• Initial submissions for Qualified Institutional Investors and Exempt Investors due within 5 business days after the last day of the month in which beneficial ownership first exceeds 5% of a covered class. 
• Initial submissions for Passive Investors on an initial Schedule 13G (in lieu of Schedule 13D) filed within 10 days after acquiring beneficial ownership of more than 5% of a covered class, would be required to file 5 days after the date of such an acquisition instead. 
• Amended submissions would be required to file 5 business days after the end of the month in which a reportable change occurs. 

• Amended submissions filed pursuant to Rule 13d-2(c) provisions would be due 5 days after the date on which beneficial ownership first exceeds 10% of a covered class, and thereafter upon any deviation by more than 5% of the covered class, with requirements applying if the thresholds were crossed at any time during a month. 
• Amended submissions pursuant to Rule 13d-2(d) would be required to file 1 business day after the date on which beneficial ownership exceeds 10% of a covered class, and thereafter upon any deviation by more than 5% of the covered class, instead of “promptly.” 
• Amended submissions would be filed only if a “material change” occurs instead of “any change.” 

• Schedules 13D and 13G, and any amendments thereto, would be permitted to be filed until 10:00 p.m. ET instead of 5:30 p.m. ET. 
• Rule 13d-3 would deem holders of certain cash-settled derivative securities as beneficial owners of the reference equity securities and clarify disclosure requirements of Schedule 13D with respect to derivative securities. 

• The operation of regulation as applied to two or more persons that form a group under the Securities Exchange Act of 1934 would be clarified, and new exemptions would permit such persons to communicate and consult with each other, jointly engage issuers, and execute certain transactions without being subject to regulation as a group. 
• Schedules 13D and 13G would be filed in a structured XML format, with the exception of exhibits. 

Proposed Rule 

https://www.sec.gov/rules/proposed/2022/33-11030.pdf 

Questions?

If you have any questions or would like to discuss the proposed amendments associated with beneficial ownership reporting in greater detail, please us know. One of our regulatory experts would be happy to help.