Investors that beneficially own more than 5% of a class of voting equity securities of an SEC-registered issuer may need to file a report with the SEC by February 14, 2012. This annual reporting deadline applies in certain circumstances to regulated institutional investors, passive investors and other categories of investors described below. Reporting is required in respect of investments in any SEC-registered issuer, including foreign private issuers and those under the Multijurisdictional Disclosure System.
General Rule: Report an Acquisition Within 10 Days of Crossing the 5% Threshold
Investors must generally file a beneficial ownership report within 10 days of an acquisition of voting equity securities that crosses the 5% threshold.1 Subject to the exceptions described below, the initial report must be filed on Schedule 13D, which requires extensive disclosure, including a detailed description of the facts and circumstances surrounding the acquisition, the source of funds and the investor’s plans regarding control of the company.
Investors that would otherwise be required to file Schedule 13D may instead file a short-form Schedule 13G provided that they own less than 20% of the class of voting equity securities and have not acquired them with the purpose or effect of changing or influencing the control of the issuer. Following the initial filing, a passive investor that acquires beneficial ownership of more than 10% of the class of voting equity securities must promptly file an amendment to Schedule 13G and must thereafter amend promptly if the ownership changes by more than 5% of the class. If there are any other changes in previously reported information, an amendment is required within 45 days of year-end – that is, by February 14, 2012.
Regulated Institutional Investors
Certain regulated institutional investors, including U.S. and non-U.S. broker-dealers, banks and insurance companies, that acquire more than 5% of a class of voting equity securities in the ordinary course of business, and not with the purpose or effect of changing or influencing the control of the issuer, are exempt from filing Schedule 13D. These institutional investors may instead file Schedule 13G, within the following deadlines:
- If the investor's beneficial ownership is greater than 5% but not more than 10%, Schedule 13G is due within 45 days of year-end.
- If the investor's beneficial ownership exceeds 10% (computed as of the last day of the month), Schedule 13G is due within 10 days of the end of the first month in which that occurred. Thereafter, the investor must file an amendment if its ownership changes by more than 5% of the class.
In addition to the above, if there are any other changes in previously reported information, an amendment to Schedule 13G is required within 45 days of year-end.
Multiple Small Acquisitions
Investors whose ownership crosses the 5% threshold by virtue of multiple small acquisitions aggregating less than 2% in any 12-month period must file Schedule 13G, and amendments to reflect any changes, within 45 days of year-end.
Other Schedule 13D Exemptions
Any investor outside the above categories that was initially exempt from reporting but was a 5% beneficial owner on December 31, 2011 must file Schedule 13G by February 14, 2012. Typically, this would occur when the investor already owned more than 5% at the time the issuer became an SEC registrant.
1 The Dodd-Frank Act authorizes the SEC to shorten the 10-day reporting deadline but the SEC has not yet taken any action to do so.
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