Seward & Kissel is reminding its clients regarding the September 30, 2024 compliance date for the SEC’s amendments to certain rules under the Securities Exchange Act of 1934 (the “Exchange Act”). The amendments accelerate the initial and amendment deadlines for Schedule 13G filings. These changes will apply to investors who beneficially own more than five percent of any voting class of equity securities1 (each, a “Covered Class”) and are eligible to file on Schedule 13G (each, a “Schedule 13G Filer”). The new initial and amendment filing deadlines for the differing types of Schedule 13G Filers are summarized below.
New Initial Schedule 13G Filing Deadlines
(1) Institutional Investors2 – An Institutional Investor must file on Schedule 13G within: (a) 45 days after the end of any calendar quarter if it makes an acquisition resulting in it beneficially owning more than 5% of the Covered Class as of the end of that calendar quarter; and (b) 5 business days after the end of any month if it makes an acquisition resulting in it beneficially owning more than 10% of the Covered Class as of the end of that month.
(2) Passive Investors3 – A Passive Investor must file on Schedule 13G within 5 business days after acquiring beneficial ownership of more than 5% of a Covered Class.
(3) Exempt Investors4 – An Exempt Investor must file on Schedule 13G within 45 days after the end of any calendar quarter if, as of the end of that calendar quarter, it beneficially owns more than 5% of the Covered Class.
New Schedule 13G Amendment Filing Deadlines
(1) Institutional Investors2 – An Institutional Investor must amend its existing Schedule 13G filing within: (a) 45 days after the end of a calendar quarter if, as of the end of that calendar quarter, there are any “material”5 changes in the information reported in the filer’s current Schedule 13G, except if the change is solely attributable to a change in the number of shares of the Covered Class outstanding; and (b) 5 business days after the end of the first month in which its beneficial ownership as of the last day of that month exceeds 10% of the Covered Class, and thereafter within 5 business days after the end of the first month in which its beneficial ownership as of the last day of that month increases or decreases by more than 5% of the Covered Class.
(2) Passive Investors3 – A Passive Investor must amend its existing Schedule 13G filing within: (a) 45 days after the end of a calendar quarter if, as of the end of that calendar quarter, there are any “material”5 changes in the information reported in the filer’s current Schedule 13G, except if the change is solely attributable to a change in the number of shares of the Covered Class outstanding; and (b) 2 business days after the date on which its beneficial ownership exceeds 10% of a Covered Class, and thereafter within 2 business days after the date on which its beneficial ownership increases or decreases by more than 5% of the Covered Class.
(3) Exempt Investors4 – An Exempt Investor must amend its existing Schedule 13G filing within 45 days after the end of a calendar quarter if, as of the end of that calendar quarter, there are any “material”5 changes in the information reported in the filer’s current Schedule 13G, except if the change is solely attributable to a change in the number of shares of the Covered Class outstanding.
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Notably, as a result of the amendments, an Institutional Investor or Exempt Investor that beneficially owns more than 5% of a Covered Class as of September 30, 2024 but is not a current Schedule 13G Filer in respect of that Covered Class will generally be required to make its initial Schedule 13G filing by 10:00 p.m. Eastern time on November 14, 2024.6 Certain existing Schedule 13G Filers may also be required to amend their existing filings by that same date and time.
1 The term “equity security” is defined in Rule 13d-1(i) of the Exchange Act and includes any voting class of equity securities registered under Section 12 of the Exchange Act.
2 An Institutional Investor may file on Schedule 13G pursuant to Rule 13d-1(b) of the Exchange Act if the securities were acquired in the ordinary course of its business with no purpose or effect of changing or influencing the control of the issuer, and not in connection with or as a participant in any transaction having such purpose or effect. For these purposes, an “Institutional Investor” is: (a) a broker or dealer registered under Section 15 of the Exchange Act; (b) a bank as defined in Section 3(a)(6) of the Exchange Act; (c) an insurance company as defined in Section 3(a)(19) of the Exchange Act; (d) an investment company registered under Section 8 of the Investment Company Act of 1940 (the “Investment Company Act”); (e) any person registered as an investment adviser under Section 203 of the Investment Advisers Act of 1940 or under the laws of any state; (f) an employee benefit plan as defined in Section 3(3) of the Employee Retirement Income Security Act of 1974 (“ERISA”) that is subject to the provisions of ERISA, or any such plan that is not subject to ERISA that is maintained primarily for the benefit of the employees of a state or local government or instrumentality, or an endowment fund; (g) a parent holding company or control person, provided the aggregate amount held directly by the parent or control person, and directly and indirectly by their subsidiaries or affiliates that are not persons specified in (a) – (j) does not exceed 1% of the securities of the Covered Class; (h) a savings association as defined in Section 3(b) of the Federal Deposit Insurance Act; (i) a church plan that is excluded from the definition of an investment company under Section 3(c)(14) of the Investment Company Act; (j) a non-U.S. institution that is the functional equivalent of any of the institutions listed in (a) – (i), so long as the non-U.S. institution is subject to a regulatory scheme that is substantially comparable to the regulatory scheme applicable to the equivalent U.S. institution; and (k) a group, provided that all the members are persons specified in (a) – (j).
3 A Passive Investor may file on Schedule 13G pursuant to Rule 13d-1(c) of the Exchange Act if it: (i) beneficially owns less than 20% of the Covered Class; and (ii) the securities were acquired in the ordinary course of its business with no purpose or effect of changing or influencing the control of the issuer, and not in connection with or as a participant in any transaction having such purpose or effect.
4 An Exempt Investor may file on Schedule 13G pursuant to Rule 13d-1(d) of the Exchange Act to the extent it is a greater than 5% beneficial owner of a Covered Class but is otherwise not required to file on Schedule 13D.
5 The SEC’s adopting release for the amendments (the “Release”) provides that the term “material” in this context is as defined in Rule 12b-2 of the Exchange Act, which provides that information is material if “there is a substantial likelihood that a reasonable investor would attach importance in determining whether to buy or sell the securities registered”. While such determinations are subjective, the Release also provides that this materiality standard is the same as for Schedule 13D amendments and thus would include an acquisition or disposition of beneficial ownership of securities equal to one percent or more of the Covered Class.
6 The SEC recently amended Regulation S-T to extend Schedule 13D and 13G filing deadline cut-off times from 5:30 p.m. to 10:00 p.m. Eastern time.
