On February 10, 2022, the Securities and Exchange Commission (SEC) announced new proposals to amend the rules governing beneficial ownership reporting under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (the Exchange Act). If adopted, the proposals would have a far-reaching impact for insiders, 5% holders, and institutional investors, most notably by shortening deadlines for publicly filing beneficial ownership reports. Currently, the Exchange Act, along with Regulation 13D-G, requires that investors who beneficially own more than 5% of a class of a registrant's equity securities to report their ownership by publicly filing a report on Schedule 13D or Schedule 13G within 10 days of becoming a 5% holder or 45 days after the end of the calendar year in which the filer became obligated to make a filing, respectively.
Key Takeaways
- The SEC has proposed amendments to the rules governing beneficial ownership reporting that would significantly impact filing deadlines.
- The proposed amendments would also require that holders of certain cash-settled derivative securities be deemed beneficial owners of the reference equity securities.
- The proposed amendments would clarify when two or more persons have formed a group under Schedule 13G.
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