On April 28, 2023, the U.S. Securities and Exchange Commission (SEC) reopened the comment period for its rulemaking proposal, Modernization of Beneficial Ownership Reporting, through the later of 30 days after the reopening release is published in the Federal Register or June 27, 2023.

The SEC reopened the comment period to give the public the opportunity to comment on supplemental data and analysis on certain economic effects of the proposed amendments provided by the staff of the SEC’s Division of Economic and Risk Analysis. A staff memorandum included in the comment file provides additional background and baseline data on Schedule 13D and 13G filings, as well as supplemental analyses on two points pertaining to Schedule 13D filings: 1) potential effects on activism that may result from the proposed change to the initial Schedule 13D filing deadline and 2) potential harms to certain selling shareholders under the existing Schedule 13D filing deadline.

As a reminder, in February 2022, the SEC proposed amendments to the rules governing beneficial ownership reporting under Sections 13(d) and (g) of the Securities Exchange Act of 1934. The proposed amendments would significantly change how investors report their beneficial ownership on Schedules 13D and 13G including, among other things, accelerating filing deadlines, expanding the definition of beneficial ownership to include cash-settled derivative securities acquired with a control intent, and clarifying the definition of a “group” for purposes of the beneficial ownership reporting rules. For more information on the proposed amendments, please see our Client Alert.