On October 10, 2023, the Securities and Exchange Commission (the “SEC”) adopted final rules amending Schedules 13D and 13G under the Securities Exchange Act of 1934, as amended (the “Exchange Act”) to update reporting rules and quicken the rate at which beneficial ownership information is made available to the public.

Background

Sections 13(d) and 13(g) of the Exchange Act and their accompanying regulations require investors who own more than 5% of a public company’s equity securities to publicly file a Schedule 13D or Schedule 13G with the SEC. Investors that intend to obtain control of a company file Schedule 13D; passive investors without an intent to control and other exempt investors file Schedule 13G.

Amendments

General. As described in more detail below, the amendments shorten the deadline for initial Schedule 13D filings from ten days to 5 business days, require that Schedule 13D amendments be filed within 2 business days, accelerate the filing deadlines for Schedule 13G beneficial ownership reports (the filing deadlines differ based on the type of filer), and extend the filing times for Schedules 13D and 13G to 10:00 p.m. Eastern Time.

The amendments also require that Schedule 13D and 13G filings be made using specific machine-readable, structured data language.

Schedule 13D Initial Filing Deadline. Schedule 13D was originally due within ten days after acquiring beneficial ownership of more than 5% or losing eligibility to file on Schedule 13G. As amended, Schedule 13D will be due within 5 business days after acquiring beneficial ownership of more than 5% or losing eligibility to file on Schedule 13G.Schedule 13G Initial Filing Deadline. Schedule 13G was originally due, for (i) Qualified Institutional Investors (“QIIs”) & Exempt Investors – 45 days after the calendar year-end in which beneficial ownership exceeds 5%; (ii) QIIs – 10 days after the month-end in which beneficial ownership exceeds 10%; and (iii) Passive Investors – due within 10 days after acquiring beneficial ownership of more than 5%.

As amended, for (i) QIIs & Exempt Investors – 45 days after calendar quarter-end in which beneficial ownership exceeds 5%; (ii) QIIs – within 5 business days after month-end in which beneficial ownership exceeds 10%; and (iii) Passive Investors – due within 5 business days after acquiring beneficial ownership of more than 5%.

Schedule 13D Amendment Triggering Events. The events triggering an amendment to Schedule 13D remain unchanged. An amended Schedule 13D must be filed if there is a material change in the facts set forth in the previously filed Schedule 13D. Schedule 13D amendments were originally due “promptly” after the triggering event. Under the new rules, Schedule 13D amendments will be due within 2 business days of the triggering event.

Schedule 13G Amendment Triggering Events. All Schedule 13G filers were originally required to file an amendment within 45 days after a calendar year-end in which any change to a previously filed Schedule 13G occurred. As amended, all filers will be required to file an amendment within 45 calendar days after a calendar quarter-end in which a material change occurred. Under Rule 13d-2(a), an acquisition or disposition of beneficial ownership of securities in an amount equal to 1% or more of the class of securities is deemed to be “material.” Acquisitions or disposition of less than 1% may be material, depending on the facts and circumstances.

QIIs were originally required to file a Schedule 13G amendment within 10 calendar days after month-end in which beneficial ownership exceeded 10% or there was a 5% increase or decrease in beneficial ownership. As amended, this has been shortened to 5 business days.

Passive investors were originally required to file a Schedule 13G amendment promptly after exceeding 10% ownership or a 5% increase or decrease in beneficial ownership. As amended, these amendments will be due within 2 business days of such changes.

EDGAR Filing Cut-Off Time

The cut-off time for filing Schedules 13D and 13G with the SEC via EDGAR will be extended from 5:30 PM to 10:00 PM Eastern Time.

Compliance Dates

The amendments will become effective 90 days after publication in the Federal Register. Compliance with the new Schedule 13G deadlines will not be required before September 30, 2024. Compliance with the structured data requirements for Schedules 13D and 13G will be required on December 18, 2024, with voluntary compliance permitted beginning on December 18, 2023.