DealLawyers.com Blog

Earlier this month, the SEC announced the adoption of final rules amending Regulation 13D-G. Here’s the 295-page adopting release, and here’s the 2-page fact sheet. Considering that the SEC had initially proposed a five calendar day deadline for Schedule 13D filings, this Diligent blog from Rebecca Sherratt notes that activist investors are breathing a collective sigh of relief since the final amendments give investors a little more leeway than as proposed. Although, Rebecca notes, “the jury is still out as to whether the rule amendments have the potential to shake up how activist investors build their stakes and kickstart their campaigns.”

We’ve shared some details on the final rule release on TheCorporateCounsel.net Blog. Below, I’m sharing our blog on the revised deadlines, but also check out our blog on the amendments & guidance related to derivatives and group formation.

Per the fact sheet, the amendments primarily:

– Shorten the deadlines for initial and amended Schedule 13D and 13G filings;
– 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.

Here’s more on the new filing deadlines, which differ a bit from the proposed form:

For Schedule 13D, the amendments shorten the initial filing deadline from 10 days to five business days and require that amendments be filed within two business days.

For certain Schedule 13G filers (i.e., qualified institutional investors and exempt investors), the amendments shorten the initial filing deadline 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 percent of the covered class.

For other Schedule 13G filers (i.e., passive investors), the amendments shorten the initial filing deadline from 10 days to five business days. In addition, for all Schedule 13G filers, the amendments generally require that an amendment be filed 45 days after the calendar quarter in which a material change occurred rather than 45 days after the calendar year in which any change occurred.

Finally, the amendments accelerate the Schedule 13G amendment obligations for qualified institutional investors and passive investors when their beneficial ownership exceeds 10 percent or increases or decreases by 5 percent.

To ease filers’ administrative burdens associated with these shortened deadlines, the amendments extend the filing “cut-off” times in Regulation S-T for Schedules 13D and 13G from 5:30 p.m. to 10:00 p.m. Eastern time.

As usual, the amendments will be effective 90 days after publication in the Federal Register, but reporting persons aren’t required to comply with the structured data requirements until December 18, 2024 (with voluntary compliance permitted beginning December 18, 2023) or the revised 13G deadlines (not 13D deadlines!) until September 30, 2024. As an example, the adopting release states “a Schedule 13G filer will be required to file an amendment within 45 days after September 30, 2024 if, as of end of the day on that date, there were any material changes in the information the filer previously reported on Schedule 13G.” Check out our “Schedules 13D & 13G” Practice Area where we’ll post memos for more info.

If you’re wondering why we didn’t give a heads-up that this was on an upcoming open meeting agenda, that’s because it wasn’t. Here’s a blog from Broc from almost 10 years ago about the SEC’s ability to adopt rules by seriatim.

– Meredith Ervine