Reopening of Comment Period for Modernization of Beneficial Ownership Reporting, 28440-28442 [2023-09454]
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28440
Federal Register / Vol. 88, No. 86 / Thursday, May 4, 2023 / Proposed Rules
responsible for overseeing the process,
ensuring senior management are
appropriately trained and competent,
ensuring processes are in place to identify,
manage, monitor and control risk exposures
(this function may be delegated to a board
appointed committee), approving all major
risk limits, and ensuring incentive
compensation measures for senior
management capture a full range of risks to
the regulated entity or the Office of Finance.
Responsibilities of the Board and Senior
Management
2. Regarding overall risk management
processes, the board of directors and senior
management should establish and sustain a
culture that promotes effective risk
management. This culture includes timely,
accurate and informative risk reports,
alignment of the overall risk profile of the
regulated entity or the Office of Finance with
its mission objectives, and the annual review
of comprehensive self-assessments of
material risks.
Independent Risk Management Function
3. A regulated entity or the Office of
Finance should have an independent risk
management function, or unit, with
responsibility for risk measurement and risk
monitoring, including monitoring and
enforcement of risk limits.
ddrumheller on DSK120RN23PROD with PROPOSALS1
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Risk Measurement, Monitoring, and Control
7. Each regulated entity and the Office of
Finance should measure, monitor, and
control its overall risk exposures, reviewing,
as applicable, market, credit, liquidity, and
operational risk exposures on both a business
unit (or business segment) and enterprisewide basis.
8. Each regulated entity and the Office of
Finance should have the risk management
systems to generate, at an appropriate
frequency, the information needed to manage
risk. As applicable, such systems should
include systems for market, credit,
operational, and liquidity risk analysis, asset
and liability management, regulatory
reporting, and performance measurement.
9. Each regulated entity and the Office of
Finance should have a comprehensive set of
risk limits and monitoring procedures to
ensure that risk exposures remain within
established risk limits, and a mechanism for
reporting violations and breaches of risk
limits to senior management and the board of
directors.
10. Each regulated entity and the Office of
Finance should ensure that it has sufficient
controls around risk measurement models to
ensure the completeness, accuracy, and
timeliness of risk information.
11. Each regulated entity and the Office of
Finance should have adequate and welltested disaster recovery and business
resumption plans for all major systems and
have remote facilitates to limit the impact of
disruptive events.
Applicable Laws, Regulations, and Policies
12. As applicable, each regulated entity
and the Office of Finance should comply
with all applicable laws, regulations, and
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supervisory guidance (e.g., advisory
bulletins) governing the management of risk.
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Standard 10—Maintenance of Adequate
Records
1. Each regulated entity and the Office of
Finance should maintain financial records in
compliance with Generally Accepted
Accounting Principles (GAAP), FHFA
guidelines, and applicable laws and
regulations.
2. Each regulated entity and the Office of
Finance should ensure that assets are
safeguarded and financial and operational
information is timely and reliable.
3. Each regulated entity and the Office of
Finance should have a records retention
program consistent with laws and corporate
policies, including accounting policies, as
well as personnel that are appropriately
trained and competent to oversee and
implement the records management plan.
4. Each regulated entity and the Office of
Finance, with oversight from its board of
directors, should conduct a review and
approval of the records retention program
and records retention schedule for all types
of records at least once every two years.
5. Each regulated entity and the Office of
Finance should ensure that reporting errors
are detected and corrected in a timely
manner.
6. Each regulated entity and the Office of
Finance should comply with all applicable
laws, regulations, and supervisory guidance
(e.g., advisory bulletins) governing the
maintenance of adequate records.
Sandra L. Thompson,
Director, Federal Housing Finance Agency.
[FR Doc. 2023–09320 Filed 5–3–23; 8:45 am]
BILLING CODE 8070–01–P
SECURITIES AND EXCHANGE
COMMISSION
17 CFR Parts 232 and 240
[Release Nos. 33–11180; 34–97405; File No.
S7–06–22]
RIN 3235–AM93
Reopening of Comment Period for
Modernization of Beneficial Ownership
Reporting
Securities and Exchange
Commission.
ACTION: Proposed rule; reopening of
comment period.
AGENCY:
The Securities and Exchange
Commission (‘‘Commission’’) is
reopening the comment period for its
proposal, Modernization of Beneficial
Ownership Reporting, Release No. 33–
11030, (Feb. 10, 2022) (‘‘Proposing
Release’’). In the Proposing Release, the
Commission proposed to amend certain
rules that govern beneficial ownership
reporting (‘‘Proposed Amendments’’).
SUMMARY:
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Fmt 4702
Sfmt 4702
The Proposed Amendments would
modernize the filing deadlines for initial
and amended beneficial ownership
reports filed on Schedules 13D and 13G.
The Proposed Amendments also would
deem holders of certain cash-settled
derivative securities as beneficial
owners of the reference equity securities
and clarify the disclosure requirements
of Schedule 13D with respect to
derivative securities. In addition, the
Proposed Amendments would clarify
and affirm the operation of the
beneficial ownership reporting rules as
applied to two or more persons that
form a group under the Securities
Exchange Act of 1934, and provide new
exemptions to permit such persons to
communicate and consult with each
other, jointly engage issuers, and
execute certain transactions without
being subject to regulation as a group.
Finally, the Proposed Amendments
would require that Schedules 13D and
13G be filed using a structured,
machine-readable data language. The
Commission is reopening the comment
period to allow interested persons an
opportunity to comment on the
additional analysis and data contained
in a staff memorandum that was added
to the public comment file on April 28,
2023.
DATES: The comment period for the
Proposing Release published March 10,
2022, at 87 FR 13846, is reopened.
Comments should be received on or
before June 27, 2023.
ADDRESSES: Comments may be
submitted by any of the following
methods:
Electronic Comments
• Use the Commission’s internet
comment form (https://www.sec.gov/
rules/submitcomments.htm); or
Paper Comments
• Send paper comments to Vanessa
A. Countryman, Secretary, Securities
and Exchange Commission, 100 F Street
NE, Washington, DC 20549–1090.
All submissions should refer to File
Number S7–06–22. This file number
should be included on the subject line
if email is used. To help the
Commission process and review your
comments more efficiently, please use
only one method of submission. The
Commission will post all submitted
comments on the Commission’s website
(https://www.sec.gov/rules/
proposed.shtml). Comments also are
available for website viewing and
printing in the Commission’s Public
Reference Room, 100 F Street NE,
Washington, DC 20549, on official
business days between the hours of 10
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Federal Register / Vol. 88, No. 86 / Thursday, May 4, 2023 / Proposed Rules
a.m. and 3 p.m. Operating conditions
may limit access to the Commission’s
Public Reference Room. Do not include
personal identifiable information in
submissions; you should submit only
information that you wish to make
available publicly. We may redact in
part or withhold entirely from
publication submitted material that is
obscene or subject to copyright
protection.
Studies, memoranda, or other
substantive items may be added by the
Commission or staff to the comment file
during this rulemaking. A notification of
the inclusion in the comment file of any
such materials will be made available
on the our website. To ensure direct
electronic receipt of such notifications,
sign up through the ‘‘Stay Connected’’
option at www.sec.gov to receive
notifications by email.
FOR FURTHER INFORMATION CONTACT:
Nicholas Panos, Senior Special Counsel,
and Valian Afshar, Special Counsel, in
the Office of Mergers and Acquisitions,
Division of Corporation Finance, at
(202) 551–3440, U.S. Securities and
Exchange Commission, 100 F Street NE,
Washington, DC 20549.
SUPPLEMENTARY INFORMATION: This
release relates to the Commission’s
Proposed Amendments to 17 CFR
240.13d–1 (‘‘Rule 13d–1’’), 17 CFR
240.13d–2 (‘‘Rule 13d–2’’), 17 CFR
240.13d–3 (‘‘Rule 13d–3’’), 17 CFR
240.13d–5 (‘‘Rule 13d–5’’), 17 CFR
240.13d–6 (‘‘Rule 13d–6’’) and 17 CFR
240.13d–101 (‘‘Rule 13d–101’’), under
the Securities Exchange Act of 1934 1
(‘‘Exchange Act’’).2 We also are
proposing amendments to 17 CFR
232.13 (‘‘Rule 13 of Regulation S–T’’)
and 17 CFR 232.201 (‘‘Rule 201 of
Regulation S–T’’) under 17 CFR part 232
(‘‘Regulation S–T’’).3
I. Background
As described more fully in the
Proposing Release, the Commission
proposed to amend certain rules to
modernize the beneficial ownership
reporting requirements.4 The Proposed
1 15
U.S.C. 78a et seq.
otherwise noted, when we refer to the
Exchange Act, or any paragraph of the Exchange
Act, we are referring to 15 U.S.C. 78a et seq. of the
United States Code, at which the Exchange Act is
codified, and when we refer to rules under the
Exchange Act, or any paragraph of these rules, we
are referring to title 17, part 240 of the Code of
Federal Regulations [17 CFR part 240], in which
these rules are published.
3 Unless otherwise noted, when we refer to
Regulation S–T, or any paragraph of the rules
thereunder, we are referring to title 17, part 232 of
the Code of Federal Regulations [17 CFR part 232],
in which these rules are published.
4 See Modernization of Beneficial Ownership
Reporting, Release Nos. 33–11030; 34–94211 (Feb.
10, 2022) [87 FR 13846 (Mar. 10, 2022)].
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2 Unless
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Amendments would, among other
things:
1. Revise the Rule 13d–1(a) filing
deadline for the initial Schedule 13D to
five days after the date on which a
person acquires more than 5% of a
covered class of equity securities; 5 and
amend Rules 13d–1(e), (f), and (g) to
shorten the filing deadline for the initial
Schedule 13D required to be filed by
certain persons who forfeit their
eligibility to report on Schedule 13G in
lieu of Schedule 13D to five days after
the event that causes the ineligibility;
2. Revise the filing deadline under
Rule 13d–2(a) for amendments to
Schedule 13D to one business day after
the date on which a material change
occurs;
3. Amend Rules 13d–1(b) and (d) to
shorten the deadline for the initial
Schedule 13G filing for Qualified
Institutional Investors 6 and Exempt
Investors to within five business days
after the last day of the month in which
beneficial ownership first exceeds 5% of
a covered class; and amend the deadline
in Rule 13d–1(c), which permits Passive
Investors to file an initial Schedule 13G
in lieu of Schedule 13D within 10 days
after acquiring beneficial ownership of
more than 5% of a covered class, to five
days after the date of such an
acquisition;
4. Revise the filing deadline for
amendments to Schedule 13G in Rule
13d–2(b) to five business days after the
end of the month in which a reportable
change occurs; 7 and amend Rule 13d–
2(c) to shorten the filing deadline for
Schedule 13G amendments filed
pursuant to that provision to five days
after the date on which beneficial
ownership first exceeds 10% of a
covered class, and thereafter upon any
deviation by more than 5% of the
covered class, with these requirements
applying if the thresholds were crossed
at any time during a month; 8
5 As used in this release, a ‘‘covered class’’ is a
class of equity securities described in Section
13(d)(1) of the Exchange Act and Rule 13d–1(i) and
generally means, with limited exception, a voting
class of equity securities registered under Section
12 of the Exchange Act.
6 Capitalized terms not defined in this release
have the meaning set forth in the Proposing Release.
7 The Proposed Amendments also would revise
Rule 13d–2(b) to require that an amendment to a
Schedule 13G be filed only if a ‘‘material change’’
occurs instead of an amendment obligation arising
for Schedule 13G filers upon the occurrence of ‘‘any
change’’ in the facts previously reported regardless
of the materiality of such change.
8 The Proposed Amendments also would revise
the Rule 13d–2(d) filing deadline for Schedule 13G
amendments filed pursuant to that provision from
a ‘‘promptly’’ standard to one business day after the
date on which beneficial ownership exceeds 10%
of a covered class, and thereafter upon any
deviation by more than 5% of the covered class.
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Fmt 4702
Sfmt 4702
28441
5. Add new paragraph (e) to Rule
13d–3 to deem holders of certain cashsettled derivative securities as beneficial
owners of the reference covered class
and amend Item 6 to Schedule 13D to
remove any implication that a person is
not required to disclose interests in all
derivative securities that use a covered
class as a reference security;
6. Amend Rule 13d–5 to align the text
of that rule, as applicable to two or more
persons who act as a group, with the
statutory language in Sections 13(d)(3)
and (g)(3) of the Exchange Act and add
a new provision in Rule 13d–5 that
would affirm that if a person, in
advance of filing a Schedule 13D,
discloses to any other person that such
filing will be made with the purpose of
causing that other person to acquire
securities in the covered class for which
the Schedule 13D will be filed and such
other person acquires securities in the
covered class, then those persons are
deemed to have formed a group within
the meaning of Section 13(d)(3);
7. Add new Rule 13d–6(c), which
would set forth the circumstances under
which two or more persons may
communicate and consult with one
another and engage with an issuer
without concern that they will be
subject to regulation as a group with
respect to the issuer’s equity securities; 9
and
8. Require that Schedules 13D and
13G be filed using a structured,
machine-readable data language.10
II. Reopening of Comment Period
Since the publication of the Proposing
Release, the staff of the Division of
Economic and Risk Analysis has
prepared a memorandum that provides
supplemental data and analysis related
to certain economic effects of the
Proposed Amendments.11
9 The Proposed Amendments also would add new
Rule 13d–6(d) to set forth the circumstances under
which two or more persons may enter into an
agreement governing a derivative security in the
ordinary course of business without concern that
they will become subject to regulation as a group
with respect to the derivative’s reference equity
securities.
10 The Proposed Amendments also would: (1)
revise Rule 13(a) of Regulation S–T to permit
Schedules 13D and 13G, and any amendments
thereto, that are submitted by direct transmission
on or before 10 p.m. eastern time on a given
business day to be deemed to have been filed on
the same business day to provide additional time
for beneficial owners to prepare and submit their
Schedule 13D or Schedule 13G filings; and (2)
amend Rule 201(a) of Regulation S–T to make the
temporary hardship exemption set forth in that
rule—which applies to unanticipated technical
difficulties preventing the timely preparation and
submission of an electronic filing—unavailable to
Schedules 13D and 13G filings.
11 Memorandum of the Staff of the Division of
Economic and Risk Analysis, Supplemental data
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Continued
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28442
Federal Register / Vol. 88, No. 86 / Thursday, May 4, 2023 / Proposed Rules
We believe that the information
presented in the memorandum has the
potential to be informative for purposes
of further evaluating the Proposed
Amendments. We are, therefore,
reopening the comment period to permit
interested parties to comment on the
staff memorandum, which has been
included in the comment file. We
encourage any interested person to
submit comments, including comments
on the data or methodology used in the
analysis contained in the memorandum
and on how this analysis should inform
our consideration of the benefits and
costs of the Proposed Amendments. If
any commenters who have already
submitted a comment letter wish to
provide supplemental or updated
comments, we encourage them to do so.
Comments are of particular assistance if
accompanied by supporting data and
analysis of the issues addressed in those
comments.
Dated: April 28, 2023.
By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023–09454 Filed 5–3–23; 8:45 am]
BILLING CODE 8011–01–P
Coast Guard
33 CFR Part 117
[Docket No. USCG–2023–0187]
RIN 1625–AA09
Drawbridge Operation Regulation;
Black River, Lorain, OH
Coast Guard, DHS.
Notice of proposed rulemaking.
AGENCY:
The Coast Guard proposes to
modify the operating schedule that
governs the Charles Berry Bridge, mile
0.6, and the Norfolk Southern Railroad
Bridge, mile 1.2, both over the Black
River. The regulation has not been
updated since 1986. The Coast Guard’s
proposed revisions will ensure the
needs of all modes of transportation are
being met.
DATES: Comments and relate material
must reach the Coast Guard on or before
July 3, 2023.
ADDRESSES: You may submit comments
identified by docket number USCG–
ddrumheller on DSK120RN23PROD with PROPOSALS1
SUMMARY:
and analysis on certain economic effects of
proposed amendments regarding the reporting of
beneficial ownership (Apr. 28, 2023), available at
https://www.sec.gov/comments/s7-06-22/
s70622.htm.
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16:38 May 03, 2023
Jkt 259001
If
you have questions on this proposed
rule, call or email If you have questions
on this temporary final rule, call or
email Mr. Lee D. Soule, Bridge
Management Specialist, Ninth Coast
Guard District; telephone 216–902–
6085, email Lee.D.Soule@uscg.mil.
SUPPLEMENTARY INFORMATION:
FOR FURTHER INFORMATION CONTACT:
I. Table of Abbreviations
CFR Code of Federal Regulations
CRSTF Cuyahoga River Safety Task Force
DHS Department of Homeland Security
FR Federal Register
IGLD International Great Lakes Datum of
1985
LWD Low Water Datum based on IGLD85
OMB Office of Management and Budget
PAWSA Ports and Waterway Safety
Assessment
NPRM Notice of Proposed Rulemaking
§ Section
U.S.C. United States Code
II. Background, Purpose, and Legal
Basis
DEPARTMENT OF HOMELAND
SECURITY
ACTION:
2023–0187 using Federal DecisionMaking Portal at https://
www.regulations.gov.
See the ‘‘Public Participation and
Request for Comments’’ portion of the
SUPPLEMENTARY INFORMATION section
below for instructions on submitting
comments.
The Black River is a tributary of Lake
Erie, created at the confluence of the
east and west branches of the Black
River at Elyria, Ohio. It then travels 12
miles to empty into Lake Erie at Lorain,
Ohio. Large commercial vessels and
powered and non-powered recreational
vessels use the river. Most of the
recreational vessels using the waterway
moor in the outer harbor basin or launch
from one of the two municipal boat
ramp locations. The head of navigation
is located at approximate river mile 3,
just past the former U.S. Steel Dock on
the south side of Lorain. The river
continues to Elyria, Ohio with water
depths reported less than 6-feet based
on LWD. There are no detours available
for vessels to avoid passing through the
bridges.
Three bridges cross the river at
Lorain, two drawbridges and one fixed.
The Charles Berry Bridge, mile 0.6, is a
double leaf bascule bridge that provides
a horizontal clearance of 148-feet and a
vertical clearance of 33-feet at center
above LWD in the closed position and
an unlimited clearance in the open
position. The Norfolk Southern Railroad
Bridge, mile 1.2, is a vertical lift bridge
that provides a horizontal clearance of
205-feet and a vertical clearance of 35feet in the closed position above LWD
and 123-feet in the open position above
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Sfmt 4702
LWD. The Lofton Henderson Memorial
Bridge, mile 2, is a fixed bridge that
provides a horizontal clearance of 256feet and a vertical clearance of 97-feet
based on LWD.
The Charles Berry Bridge, mile 0.6, is
governed by 33 CFR 117.850, allowing
the bridge to only open twice an hour
and operate in evenings with a 2-hour
advance notice. The Norfolk Southern
Railroad Bridge, mile 1.2, does not have
operating regulations.
III. Discussion of Proposed Rule
On August 7, 1986, we published in
the Federal Register (51 FR 28380), on
request of the Lorain County Engineer,
to limit bridge movements and prevent
traffic congestion at the bridge. In the
intervening 37 years, several riverfront
businesses that received maritime traffic
have closed and/or been removed, to
include two steel mills at the head of
navigation, an iron ore terminal, a coal
fired power plant, and Ford Lorain
Assembly Plant. These changes have
impacted traffic at the Charles Berry
Bridge, mile 0.6, reducing the number of
vessels visiting the harbor and reducing
the number of workers traveling to and
from work over the bridges.
According to the Ohio Department of
Transportation Data Management
System, since 1986, vehicle crossings at
the Charles Berry Bridge, mile 0.6, have
decreased year over year. In 2022, the
annual daily average vehicle crossing
was 2,161 vehicles, a decline of almost
45% in vehicle crossings since 1986.
The Charles Berry Bridge, mile 0.6,
provides 33-feet of vertical clearance
above LWD and the current regulation
requires the bridge to open on signal for
commercial vessels. Accordingly, the
only vessels the regulation restricts is
the sailing population. Arguably, the
Coast Guard should have amended the
regulations after the lakeside marina
opened in 1989, moving most of the
recreational vessels, including sailing
vessels, from the docks in the Lorain
River to the harbor north of the bridges.
The primary purpose of the current
bridge regulation was to prevent vehicle
congestion at the bridge. However, with
the reduction of vehicles and vessels
transiting the river on a regular basis,
the calculus has shifted, and the Coast
Guard proposes to revise the regulation
to remove the burden from the
recreational vessels using the waterway.
We are proposing to remove the
restricted bridge opening times of on the
hour and half hour. We also propose to
remove the restrictions of 8 a.m., 3 p.m.,
4 p.m., and 5 p.m. because the traffic
counts do not support a significant
gathering of vehicles at the bridge
during those times.
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]]>Agencies
[Federal Register Volume 88, Number 86 (Thursday, May 4, 2023)]
[Proposed Rules]
[Pages 28440-28442]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2023-09454]
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SECURITIES AND EXCHANGE COMMISSION
17 CFR Parts 232 and 240
[Release Nos. 33-11180; 34-97405; File No. S7-06-22]
RIN 3235-AM93
Reopening of Comment Period for Modernization of Beneficial
Ownership Reporting
AGENCY: Securities and Exchange Commission.
ACTION: Proposed rule; reopening of comment period.
-----------------------------------------------------------------------
SUMMARY: The Securities and Exchange Commission (``Commission'') is
reopening the comment period for its proposal, Modernization of
Beneficial Ownership Reporting, Release No. 33-11030, (Feb. 10, 2022)
(``Proposing Release''). In the Proposing Release, the Commission
proposed to amend certain rules that govern beneficial ownership
reporting (``Proposed Amendments''). The Proposed Amendments would
modernize the filing deadlines for initial and amended beneficial
ownership reports filed on Schedules 13D and 13G. The Proposed
Amendments also would deem holders of certain cash-settled derivative
securities as beneficial owners of the reference equity securities and
clarify the disclosure requirements of Schedule 13D with respect to
derivative securities. In addition, the Proposed Amendments would
clarify and affirm the operation of the beneficial ownership reporting
rules as applied to two or more persons that form a group under the
Securities Exchange Act of 1934, and provide new exemptions to permit
such persons to communicate and consult with each other, jointly engage
issuers, and execute certain transactions without being subject to
regulation as a group. Finally, the Proposed Amendments would require
that Schedules 13D and 13G be filed using a structured, machine-
readable data language. The Commission is reopening the comment period
to allow interested persons an opportunity to comment on the additional
analysis and data contained in a staff memorandum that was added to the
public comment file on April 28, 2023.
DATES: The comment period for the Proposing Release published March 10,
2022, at 87 FR 13846, is reopened. Comments should be received on or
before June 27, 2023.
ADDRESSES: Comments may be submitted by any of the following methods:
Electronic Comments
Use the Commission's internet comment form (https://www.sec.gov/rules/submitcomments.htm); or
Paper Comments
Send paper comments to Vanessa A. Countryman, Secretary,
Securities and Exchange Commission, 100 F Street NE, Washington, DC
20549-1090.
All submissions should refer to File Number S7-06-22. This file number
should be included on the subject line if email is used. To help the
Commission process and review your comments more efficiently, please
use only one method of submission. The Commission will post all
submitted comments on the Commission's website (https://www.sec.gov/rules/proposed.shtml). Comments also are available for website viewing
and printing in the Commission's Public Reference Room, 100 F Street
NE, Washington, DC 20549, on official business days between the hours
of 10
[[Page 28441]]
a.m. and 3 p.m. Operating conditions may limit access to the
Commission's Public Reference Room. Do not include personal
identifiable information in submissions; you should submit only
information that you wish to make available publicly. We may redact in
part or withhold entirely from publication submitted material that is
obscene or subject to copyright protection.
Studies, memoranda, or other substantive items may be added by the
Commission or staff to the comment file during this rulemaking. A
notification of the inclusion in the comment file of any such materials
will be made available on the our website. To ensure direct electronic
receipt of such notifications, sign up through the ``Stay Connected''
option at www.sec.gov to receive notifications by email.
FOR FURTHER INFORMATION CONTACT: Nicholas Panos, Senior Special
Counsel, and Valian Afshar, Special Counsel, in the Office of Mergers
and Acquisitions, Division of Corporation Finance, at (202) 551-3440,
U.S. Securities and Exchange Commission, 100 F Street NE, Washington,
DC 20549.
SUPPLEMENTARY INFORMATION: This release relates to the Commission's
Proposed Amendments to 17 CFR 240.13d-1 (``Rule 13d-1''), 17 CFR
240.13d-2 (``Rule 13d-2''), 17 CFR 240.13d-3 (``Rule 13d-3''), 17 CFR
240.13d-5 (``Rule 13d-5''), 17 CFR 240.13d-6 (``Rule 13d-6'') and 17
CFR 240.13d-101 (``Rule 13d-101''), under the Securities Exchange Act
of 1934 \1\ (``Exchange Act'').\2\ We also are proposing amendments to
17 CFR 232.13 (``Rule 13 of Regulation S-T'') and 17 CFR 232.201
(``Rule 201 of Regulation S-T'') under 17 CFR part 232 (``Regulation S-
T'').\3\
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\1\ 15 U.S.C. 78a et seq.
\2\ Unless otherwise noted, when we refer to the Exchange Act,
or any paragraph of the Exchange Act, we are referring to 15 U.S.C.
78a et seq. of the United States Code, at which the Exchange Act is
codified, and when we refer to rules under the Exchange Act, or any
paragraph of these rules, we are referring to title 17, part 240 of
the Code of Federal Regulations [17 CFR part 240], in which these
rules are published.
\3\ Unless otherwise noted, when we refer to Regulation S-T, or
any paragraph of the rules thereunder, we are referring to title 17,
part 232 of the Code of Federal Regulations [17 CFR part 232], in
which these rules are published.
---------------------------------------------------------------------------
I. Background
As described more fully in the Proposing Release, the Commission
proposed to amend certain rules to modernize the beneficial ownership
reporting requirements.\4\ The Proposed Amendments would, among other
things:
---------------------------------------------------------------------------
\4\ See Modernization of Beneficial Ownership Reporting, Release
Nos. 33-11030; 34-94211 (Feb. 10, 2022) [87 FR 13846 (Mar. 10,
2022)].
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1. Revise the Rule 13d-1(a) filing deadline for the initial
Schedule 13D to five days after the date on which a person acquires
more than 5% of a covered class of equity securities; \5\ and amend
Rules 13d-1(e), (f), and (g) to shorten the filing deadline for the
initial Schedule 13D required to be filed by certain persons who
forfeit their eligibility to report on Schedule 13G in lieu of Schedule
13D to five days after the event that causes the ineligibility;
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\5\ As used in this release, a ``covered class'' is a class of
equity securities described in Section 13(d)(1) of the Exchange Act
and Rule 13d-1(i) and generally means, with limited exception, a
voting class of equity securities registered under Section 12 of the
Exchange Act.
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2. Revise the filing deadline under Rule 13d-2(a) for amendments to
Schedule 13D to one business day after the date on which a material
change occurs;
3. Amend Rules 13d-1(b) and (d) to shorten the deadline for the
initial Schedule 13G filing for Qualified Institutional Investors \6\
and Exempt Investors to within five business days after the last day of
the month in which beneficial ownership first exceeds 5% of a covered
class; and amend the deadline in Rule 13d-1(c), which permits Passive
Investors to file an initial Schedule 13G in lieu of Schedule 13D
within 10 days after acquiring beneficial ownership of more than 5% of
a covered class, to five days after the date of such an acquisition;
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\6\ Capitalized terms not defined in this release have the
meaning set forth in the Proposing Release.
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4. Revise the filing deadline for amendments to Schedule 13G in
Rule 13d-2(b) to five business days after the end of the month in which
a reportable change occurs; \7\ and amend Rule 13d-2(c) to shorten the
filing deadline for Schedule 13G amendments filed pursuant to that
provision to five days after the date on which beneficial ownership
first exceeds 10% of a covered class, and thereafter upon any deviation
by more than 5% of the covered class, with these requirements applying
if the thresholds were crossed at any time during a month; \8\
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\7\ The Proposed Amendments also would revise Rule 13d-2(b) to
require that an amendment to a Schedule 13G be filed only if a
``material change'' occurs instead of an amendment obligation
arising for Schedule 13G filers upon the occurrence of ``any
change'' in the facts previously reported regardless of the
materiality of such change.
\8\ The Proposed Amendments also would revise the Rule 13d-2(d)
filing deadline for Schedule 13G amendments filed pursuant to that
provision from a ``promptly'' standard to one business day after the
date on which beneficial ownership exceeds 10% of a covered class,
and thereafter upon any deviation by more than 5% of the covered
class.
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5. Add new paragraph (e) to Rule 13d-3 to deem holders of certain
cash-settled derivative securities as beneficial owners of the
reference covered class and amend Item 6 to Schedule 13D to remove any
implication that a person is not required to disclose interests in all
derivative securities that use a covered class as a reference security;
6. Amend Rule 13d-5 to align the text of that rule, as applicable
to two or more persons who act as a group, with the statutory language
in Sections 13(d)(3) and (g)(3) of the Exchange Act and add a new
provision in Rule 13d-5 that would affirm that if a person, in advance
of filing a Schedule 13D, discloses to any other person that such
filing will be made with the purpose of causing that other person to
acquire securities in the covered class for which the Schedule 13D will
be filed and such other person acquires securities in the covered
class, then those persons are deemed to have formed a group within the
meaning of Section 13(d)(3);
7. Add new Rule 13d-6(c), which would set forth the circumstances
under which two or more persons may communicate and consult with one
another and engage with an issuer without concern that they will be
subject to regulation as a group with respect to the issuer's equity
securities; \9\ and
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\9\ The Proposed Amendments also would add new Rule 13d-6(d) to
set forth the circumstances under which two or more persons may
enter into an agreement governing a derivative security in the
ordinary course of business without concern that they will become
subject to regulation as a group with respect to the derivative's
reference equity securities.
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8. Require that Schedules 13D and 13G be filed using a structured,
machine-readable data language.\10\
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\10\ The Proposed Amendments also would: (1) revise Rule 13(a)
of Regulation S-T to permit Schedules 13D and 13G, and any
amendments thereto, that are submitted by direct transmission on or
before 10 p.m. eastern time on a given business day to be deemed to
have been filed on the same business day to provide additional time
for beneficial owners to prepare and submit their Schedule 13D or
Schedule 13G filings; and (2) amend Rule 201(a) of Regulation S-T to
make the temporary hardship exemption set forth in that rule--which
applies to unanticipated technical difficulties preventing the
timely preparation and submission of an electronic filing--
unavailable to Schedules 13D and 13G filings.
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II. Reopening of Comment Period
Since the publication of the Proposing Release, the staff of the
Division of Economic and Risk Analysis has prepared a memorandum that
provides supplemental data and analysis related to certain economic
effects of the Proposed Amendments.\11\
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\11\ Memorandum of the Staff of the Division of Economic and
Risk Analysis, Supplemental data and analysis on certain economic
effects of proposed amendments regarding the reporting of beneficial
ownership (Apr. 28, 2023), available at https://www.sec.gov/comments/s7-06-22/s70622.htm.
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[[Page 28442]]
We believe that the information presented in the memorandum has the
potential to be informative for purposes of further evaluating the
Proposed Amendments. We are, therefore, reopening the comment period to
permit interested parties to comment on the staff memorandum, which has
been included in the comment file. We encourage any interested person
to submit comments, including comments on the data or methodology used
in the analysis contained in the memorandum and on how this analysis
should inform our consideration of the benefits and costs of the
Proposed Amendments. If any commenters who have already submitted a
comment letter wish to provide supplemental or updated comments, we
encourage them to do so. Comments are of particular assistance if
accompanied by supporting data and analysis of the issues addressed in
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those comments.
Dated: April 28, 2023.
By the Commission.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2023-09454 Filed 5-3-23; 8:45 am]
BILLING CODE 8011-01-P
