SEC Proposes Substantial Changes To Beneficial Ownership Reporting

On February 10, 2022, the Securities and Exchange Commission (the "SEC") proposed substantial amendments to the reporting regime for beneficial owners of greater than 5% in public companies.¹ The SEC's proposal would accelerate the filing deadlines for Schedule 13D and Schedule 13G and require more frequent amendments to Schedule 13G filings. The proposal would also change how some cash-settled derivatives are treated and when investors have formed a "group" and must aggregate their holdings.

Background

Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (the "Exchange Act") and the related rules require beneficial owners of more than 5% of an Exchange Act-registered class of voting equity securities to file a Schedule 13D or Schedule 13G to publicly report such ownership. Rule 13d-3 provides that a security is beneficially owned by anyone who has the right within 60 days to direct the voting or disposition of such security.² Beneficial owners of a