The SEC Staff has issued new guidance addressing critical questions in shareholder activism, including when cash-settled derivatives trigger beneficial ownership reporting, what disclosures activist funds must make about their investors, and who qualifies as a participant in proxy contests. These interpretations clarify long-standing ambiguities around total return swaps, activist fund structures, and proxy solicitation financing.
United StatesCorporate/Commercial Law
On July 9, 2026, the Staff of the SEC’s Division of Corporation Finance issued six new Corporation Finance Interpretations (CFIs), including Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting CFIs 105.08, 105.09, 105.10, 110.09 and 110.10, and Proxy Rules and Schedules 14A/14C CFI 155.02. The new guidance addresses several recurring issues in the shareholder activism context, including the treatment of cash-settled total return swaps, Schedule 13D disclosure obligations for activist investment vehicles, and participant status under the proxy rules.
Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G Beneficial Ownership Reporting CFIs 105.08-105.10 confirm that a standard cash-settled total return swap (TRS), standing alone, does not confer beneficial ownership of the reference securities or shares held by a counterparty for hedging purposes. At the same time, the Staff reiterates that Rule 13d-3(b)’s anti-evasion provision remains
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