Written by Robert Quinn
Founder & CEO
On February 10, the SEC proposed to amend a number of rules related to Schedules 13D and 13G in an effort to modernize the threshold disclosure regime, noting that the deadline for filing a Schedule 13D has remained unchanged for 50 years. The proposed amendment would also deem holders of cash-settled derivative securities to beneficially own the reference securities just as if they held such securities directly.
The less onerous reporting requirements under 13G are available for exempt investors, qualified institutional investors (“QIIs”) and passive investors.
The proposed changes as summarized by the SEC include:
| Issue | Current Schedule 13G | Proposed Schedule 13D | Current Schedule 13G | Proposed Schedule 13G |
|---|---|---|---|---|
| Initial Filing Deadline | Within 10 days after acquiring beneficial ownership of more than 5% or losing eligibility to file on Schedule 13G. | Within five days after acquiring beneficial ownership of more than 5% or losing eligibility to file on Schedule 13G. | QIIs & Exempt Investors: 45 days after calendar year-end in which beneficial ownership exceeds 5%. Rules 13d-1(b) and (d).
Passive Investors: Within 10 days after acquiring beneficial ownership of more than 5%. |
QIIs & Exempt Investors: Five business days after month-end in which beneficial ownership exceeds 5%. Rules 13d-1(b) and (d).
Passive Investors: Within five days after acquiring beneficial ownership of more than 5%. |
| Amendment Triggering Event | Material change in the facts set forth in the previous Schedule 13D. | No amendment proposed – material change in the facts set forth in the previous Schedule 13D). | All Schedule 13G Filers: Any change in the information previously reported on Schedule 13G. Rule 13d-2(b). QIIs &
Passive Investors: Upon exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership. |
All Schedule 13G Filers: Material change in the information previously reported on Schedule 13G. Rule 13d-2(b).
QIIs & Passive Investors: No amendment proposed – upon exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership. |
| Amendment Filing Deadline | Promptly after the triggering event. | Within one business day after the triggering event. | All Schedule 13G Filers: 45 days after calendar year- end in which any change occurred.
QIIs: 10 days after month- end in which beneficial ownership exceeded 10% or there was, as of the month- end, a 5% increase or decrease in beneficial ownership. Rule 13d-2(c). Passive Investors: Promptly after exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership. Rule 13d-2(d). |
All Schedule 13G Filers: Five business days after month-end in which a material change occurred.
QIIs: Five days after exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership. Rule 13d-2(c). Passive Investors: One business day after exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership. Rule 13d-2(d). |
| Filing Cut-off Time | 5:30pm eastern time | 10 pm eastern time | 5:30pm eastern time | 10pm eastern time |
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