On February 10, 2022, the SEC proposed rule amendments to modernize the beneficial ownership reporting requirements under Sections 13(d) and (g) of the Exchange Act from their last updates in 1968 and 1977, respectively. The proposed rules aim at addressing “information asymmetries” concerns in today’s markets.

Specifically, the proposed amendments would: (1) accelerate the Schedule 13D filing deadlines from 10 days to five days and require that amendments be filed within one business day; and (2) accelerate Schedule 13G filing deadlines from 45 days after year end to five business days after the end of the month in which the investor reaches the 5% beneficial ownership threshold (for qualified institutional investors and exempt investors) and from 10 days to five days (for passive investors), and also require for all Schedule 13G filers that amendments be filed five business days after the month in which a material change occurred rather than 45 days after the year in which any change occurred. The amendments would also extend the filing cut-off time for acceptance on EDGAR from 5:30 p.m. to 10:00 p.m. Eastern time.

Finally, the proposed rules would also expand the scope of the beneficial ownership rules to certain cash-settled derivative securities, clarify when two or more persons have formed a “group” subject to beneficial ownership reporting obligations, and require the Schedules’ filings to use a structured, machine-readable data language. The comment period on the proposed amendments will be open until 30 days after the proposal is published in the Federal Register or April 11, 2022 (60 days after issuance), whichever is later.