In February 2022, the SEC proposed comprehensive changes to modernize the beneficial ownership reporting regime under Section 13(d) of the Securities Exchange Act of 1934 and Regulation S‑T, including significantly shorter filing deadlines for Schedules 13D and 13G; inclusion of certain cash-settled derivatives in calculating whether a beneficial owner meets the reporting thresholds; and specifying when two or more persons would be deemed a “group” for reporting purposes under the disclosure regime. The SEC recently issued final rules shortening the filing deadlines for Schedules 13D and 13G. The compliance date for the revised Schedule 13D filing deadlines is February 5, 2024, while the compliance date for the revised Schedule 13G filing deadlines is September 30, 2024. In lieu of new rules addressing derivatives and group formation, however, the SEC issued guidance. “Thanks to the comment process and the SEC’s recognition of the concerns raised, most of the controversial pieces of the proposed rules were walked back,” Schulte Roth partner Eleazer Klein told the Hedge Fund Law Report. This article discusses the final rules and new guidance – and the compliance challenges they pose – with additional commentary from Klein and Schulte Roth partner Adriana Schwartz. See our two-part series “SEC Proposes Comprehensive Changes to Beneficial Ownership Rules”: Part One
(Apr. 21, 2022); and Part Two
(Apr. 28, 2022).