iOn 10 October 2023, the US Securities and Exchange Commission (SEC) announced it had adopted rule amendments to require market participants to provide more timely information on their positions in a covered class of equity securities. These amendments, among other things:
- Shorten the filing deadlines for initial and amended beneficial ownership reports filed on Schedules 13D and 13G;
- Extend the deadline by which Schedules 13D and 13G must be filed on a given business day to 10:00 PM ET;
- Clarify the disclosure requirements of Schedule 13D with respect to derivative securities; and
- Require that Schedule 13D and 13G filings be made using a structured, machine readable data language.
SCHEDULE 13D AND 13G FILING DEADLINE AMENDMENTS
The SEC’s final amendments shorten deadlines for initial and amended filings for both Schedule 13D and Schedule 13G filers. The new deadlines are as follows:
Schedule 13D
Initial Filing Deadline:
Within five business days after acquiring beneficial ownership of more than 5% or losing eligibility to file on Schedule 13G.
Amendment Triggering Event:
Same as current Schedule 13D—material change in the facts set forth in the previous Schedule 13D.
Amendment Filing Deadline:
Within two business days after the triggering event.
Schedule 13G for Qualified Institutional Investors (Exchange Act Rule 13d-1(b) Filers)
Initial Filing Deadline:
45 days after calendar quarter-end in which beneficial ownership exceeds 5%, or five business days after month-end in which beneficial ownership exceeds 10%.
Amendment Triggering Event:
Material change in the information previously reported on Schedule 13G, or upon exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership.
Amendment Filing Deadline:
45 days after calendar quarter-end in which a material change occurred, or five business days after month-end in which beneficial ownership exceeds 10% or a 5% increase or decrease in beneficial ownership.
Schedule 13G for Passive Investors (Exchange Act Rule 13d-1(c) Filers)
Initial Filing Deadline:
Within five business days after acquiring beneficial ownership of more than 5%.
Amendment Triggering Event:
Material change in the information previously reported on Schedule 13G, or upon exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership.
Amendment Filing Deadline:
45 days after calendar quarter-end in which a material change occurred, or two business days after exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership.
Schedule 13G for Exempt Investors (Exchange Act Rule 13d-1(d) Filers)
Initial Filing Deadline:
45 days after calendar quarter-end in which beneficial ownership exceeds 5%.
Amendment Triggering Event:
Material change in the information previously reported on Schedule 13G.
Amendment Filing Deadline:
45 days after calendar quarter-end in which a material change occurred.
SCHEDULE 13D AND 13G FILING “CUT-OFF” TIMES AND DATA LANGUAGE
Schedule 13D and 13G filing cut-off times have been extended from 5:30 PM ET to 10:00 PM ET.
Additionally, Schedules 13D and 13G must be filed using a structured, machine-readable data language (i.e., Schedules 13D/G specific Extensible Markup Language (XML)), excluding exhibits thereto. This requirement is intended to make it easier for market participants to access, compile, and analyze information that is disclosed on Schedules 13D and 13G.
GUIDANCE WITH RESPECT TO THE FORMATION OF A GROUP
In addition to the amendments discussed above, the adopting release also provides guidance regarding the formation of a group under Exchange Act sections 13(d)(3) and 13(g)(3). The guidance clarifies the SEC’s view set forth in the proposed rules—that, depending on particular facts and circumstances, concerted actions by two or more persons for the purpose of acquiring, holding, or disposing of securities of an issuer are sufficient to constitute the formation of a group regardless of the existence of an express agreement to that effect.
KEY DEADLINES
The amendments are effective on the date that falls 90 days after the date of publication in the Federal Register. Compliance deadlines are as follows:
- Compliance with the structured data requirement for Schedules 13D and 13G will be required on 18 December 2024, though filers may begin to voluntarily comply with the requirement beginning on 18 December 2023
- Compliance with the revised Schedule 13G filing deadlines will be required beginning on 30 September 2024
- Compliance with the revised Schedule 13D filing deadlines (and other amendments) will be required upon the effectiveness of the amendments (90 days after date of publication in the Federal Register)
