Proposed Rule Changes to SEC Beneficial Ownership Reporting

On Feb.10, 2022, the Securities and Exchange Commission (“SEC”) proposed amendments to the rules governing beneficial ownership reporting (“Proposal”). The Proposal seeks to:

• Tighten filing deadlines for Schedule 13D and Schedule 13G;
• Require inclusion of certain cash-settled derivative securities (other than cash settled swaps) in determining beneficial ownership for Schedule 13D filers and require disclosure of all cash settled derivative securities in Item 6 of Schedule 13D;
• Clarify when persons form a “group”; and
• Require that Schedules 13D and 13G be filed using a structured, machine-readable data language.

In this article for the Harvard Law School Forum on Corporate Governance, SRZ partners Ele Klein and Adriana Schwartz and special counsel Clara Zylberg provide an overview of the Proposal.