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SEC Adopts 13D/13G Amendments

The SEC adopted today amendments that will, among other things:

  • shorten the deadline for initial Schedule 13D filings from 10 days to five business days;
  • require that Schedule 13D amendments be filed within two business days (rather than “promptly,” which had been interpreted by many practitioners as within one business day in most cases involving ownership changes under Rule 13d-2(a) that trigger the amendment requirement);
  • shorten the initial Schedule 13G filing deadline for qualified institutional investors and exempt investors 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;
  • shorten the initial Schedule 13G filing deadline for passive investors from 10 days to 5 business days;
  • revise the Schedule 13G amendment deadline for all 13G filers from 45 days after the end of a calendar year in which any change occurs (other than those exempted under Rule 13d-2(b)) to 45 days after the end of the calendar quarter in which a material change occurs;
  • revise from “promptly” to two business days the Schedule 13G amendment obligations under Rule 13d-2(d) for qualified institutional investors and passive investors when their beneficial ownership exceeds 10% or increases or decreases by 5%;
  • extends the EDGAR filing cut-off time for Schedules 13D and 13G from 5:30 pm to 10:00 pm Eastern time;
  • clarify the Schedule 13D disclosure requirements with respect to derivative securities; and
  • require that Schedule 13D and 13G filings be made using a structured, machine-readable data language.

Pages 10-11 of the adopting release contains a table summarizing the changes.  The adopting release also provides guidance regarding the current legal standard governing when two or more persons may be considered a group for the purposes of determining whether the beneficial ownership threshold has been met, as well as how, under the current beneficial ownership reporting rules, an investor’s use of certain cash-settled derivative securities may result in the person being treated as a beneficial owner of the class of the reference equity securities.

The amendments will become effective 90 days after publication in the Federal Register. Compliance with the revised Schedule 13G filing deadlines will be required beginning on Sept. 30, 2024. Compliance with the structured data requirement for Schedules 13D and 13G will be required on Dec. 18, 2024. Compliance with the other rule amendments will be required upon their effectiveness.