Schedules 13D & 13G

October 10, 2023, the SEC adopted the following rule amendments governing  ownership reporting under SC13D & SC13G.

• Shorten the deadlines for initial and amended Schedule 13D and 13G filings.  Reporting times are shorter than previous rule of 10 days.
• Item 6 of SC13D to clarify that an individual must disclose interests in all derivative securities, including cash-settled derivative securities, that use a covered class as a reference security. 
• Require that Schedule 13D and 13G filings be made using a structured, machine-readable data language. Compliance begins December 18, 2023. 
• Provide guidance on cash-settled derivatives and group formation. Guidance as to when cash-settled derivatives are counted toward the threshold for beneficial ownership, and to what constitutes formation of a group for the purposes of beneficial ownership.

Beneficial Ownership Requirements

When a person or group of persons acquires beneficial ownership of more than 5% of a voting class of a company’s equity securities, they are required to file a Schedule 13D and 13G with the SEC. Depending upon the facts and circumstances, they may be eligible to file the shorter Schedule 13G in lieu of Schedule 13D. 

Schedule 13D and when to file

Beneficial owners who must file SC13D are considered active investors, where the person involved seek to influence management or exert control. The SEC mandates that any beneficial owners must:

• File a Schedule 13D within 5 business days after the purchase of securities
• File an Amendment within 2 business days on material changes

Schedule 13G and when to file

SC13G filers are considered passive investors, qualified institutional investors, exempt investors. Persons not seeking to acquire or influence control of the issuer and who own more than 5% of the class of securities. 

The following exemptions allows an Investor to file Schedule 13G in lieu of Schedule 13D:

• Passive Investor. Persons holding more than 5% of securities and not with intent of influencing control of the issuer must file within 5 business days. Amendments are to be filed 2 business days after exceeding 10% beneficial ownership or a 5% increase or decrease in beneficial ownership. Rule 13d-1(c)
• Institutional Investor. Persons holding more than 5% of securities and not with intent of influencing control of the issuer must file within 45 days after the end of calendar quarter. Amendments are to be filed 5 business days after month-end in which beneficial ownership exceeds 10% or a 5% increase or decrease in beneficial ownership. Rule 13d-1(b) 
• Exempt investor. Persons holding more than 5% of securities and not with intent of influencing control of the issuer must file within 45 days after the end of calendar quarter. Rule 13d-1(d) 
• All Schedule 13G filers must file Amendments within 45 days after the end of calendar quarter in which a material change occurred. 

Resources
SC13D & 13G Questions and Answers
SC13D template (Word)
SC13G template (word)

Contact a Sales Representative to file forms SC13D & 13G at 904-363-0506.