U.S. Modernization of Beneficial Ownership Reporting (13D and 13G) is on the way

Post by Caleb Woo, Head of Client Success

Back in Nov 2nd, 2021, we raised the awareness that U.S. regulatory reporting looks like it is going to have its first major change in a long while, noting the shareholding disclosure rules are more than five decades old! Original post  

The 13D and 13G are reports sent to the SEC from shareholders who own more than 5% of the voting class of a publicly traded security. The SEC published on 10 Feb 2022, a paper proposing to modernize its beneficial ownership reporting rules and shorten the reporting timeline.

The proposed amendments for Schedule 13D and 13G filers will shorten many of the timelines from 10 or 45 days to five days. In certain instances, the timeline is reduced to one business day! This is a big leap from the “leisurely” 45-days timeline for certain reports.

Other proposed amendments include holders of certain cash-settled derivative securities being “deemed” beneficial owners of the reference equity securities, as well as clarification of the circumstances under which two or more persons have formed a “group”. This would mean more aggregation across entities within a group and more calculations and aggregations in order to determine positions to be reported.

Also, notably, the proposed amendments for 13D and 13G would require that these filings use a structured, machine-readable data language for investors to access and analyze information more easily. This would mean the need for software to generate the type of files to be submitted to the SEC.

 

With reduced timelines and requirement for machine-readable files, there is a need to modernize and automate your shareholding disclosure process to meet the expectations of the SEC.

At Artius Global, we too believe in leveraging technology to modernize productivity and efficiency. Simplifying shareholding disclosure is how we enable our clients.

Please reach out to find out more

For some information on the proposed amendments, please refer to this

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