Amendment Requirements for SEC 13D and 13G Filers

Introduction

The following article is intended to provide an overview of U.S. Securities and Exchange Commission (“SEC”) Sections 13(d) and 13(g) Amendment Requirements. The overview is general in nature, and readers are encouraged to review the specific regulations and/or consult with a compliance professional to determine the applicability to their particular situation.

 

Amendment Requirements for 13D Filers

Rule 13d-2 of the Securities Exchange Act of 1934 (the "Act") requires you to promptly, within two business days, amend Schedule 13D whenever material changes in the information disclosed on a Schedule 13D occur. A material change includes any material increase or decrease in the percentage of the class of securities you are deemed to "beneficially own." For instance, if you manage more than 5% in the shares of an issuer and the percentage managed increases or decrease by more than 1% (whether through a transaction or other event), you must amend your 13D filing.

You must continue to make appropriate amendments so long as you continue to manage more than 5% of any class of an issuer's voting shares. If you fall below the 5% threshold, you must make one (final) amendment notifying the SEC of this.

There are also other circumstances that qualify as a material change requiring an amendment. For instance, if you acquire warrants that are not exercisable within 60 days, you may still need to amend Schedule 13D to revise your discussion of your plans concerning the acquisition of additional securities and related contracts, even if the amount of voting shares you manage has not yet changed.

 

 

Amendment Requirements for 13G Filers

Qualified institutional investors, including investment advisors registered with the SEC or a state, must amend their Schedule 13G within 10 days after the end of the first time their "beneficial ownership" exceeds 10% of the class of equity securities at month end.

After that, qualified institutional investors must amend their Schedule 13G within 10 days from when their "beneficial ownership" increases or decreases by more than 5% of the class of securities over the amount held at the previous month end.

Qualified institutional investors must also file a Schedule 13D within 10 calendar days after they cease being eligible to file a Schedule 13G rather than a Schedule 13D.

In addition, passive investors beneficially owning less than 20% of an equity security must amend their Schedule 13G promptly, within two business days, after acquiring beneficial ownership of more than 10% of the class of equity securities, and after that, within two business days of increasing or decreasing their ownership by more than 5%.

You must also file an annual amendment to the 13G if there have been any changes - immaterial or material - to your filed 13G. This must be done within 45 days of year end. You do not need to file an amendment if there have been no changes to the information filed or if the only change is to the percentage of securities owned resulting solely from a change in the number of shares outstanding.

 

 

 

Important Notes

 

· You should independently review your Schedule 13D and 13G filing obligations. There are many factual determinations that may impact whether you must make a filing or amend a prior filing, which Schedule you must file (or amend), and when you must make your filing.

 

· Interactive Brokers will provide you with notices, on a best efforts basis, only when you cross certain thresholds (5%, 10%, 20%) or a significant change in the percentage of shares you manage occurs. There may be other situations that give rise to the need to file or amend a Schedule 13D or Schedule 13G for which you will not receive an alert from Interactive Brokers.

 

· You should monitor holdings of specific classes of issuer equity securities in the accounts you manage to ensure compliance with your Schedule 13D or 13G filing and amendment obligations.

 

· Notices do not cover (nor will they take into account) certain securities not commonly traded through Interactive Brokers, namely equities in:

a. an insurance company that would have to be registered except for the exemption from registration in Section 12(g)(2)(G) of the Act;

b. a closed-end investment company registered under the Investment Company Act of 1940; or

c. a Native Corporation pursuant to Section 1639c(d)(6) of title 43.

You should therefore separately account for and analyze any holdings of such equity securities you may have to comply with Section 13(d) of the Act.

 

· Alerts sent are based exclusively on the beneficial ownership of relevant securities of the specific advisor identified. It does not account for any group aggregation rules that may apply when two or more persons agree to act together for the purpose of acquiring, holding, voting or disposing of the equity securities of an issuer.

 

· Alerts sent relate solely to holdings in accounts maintained at Interactive Brokers and not any accounts maintained elsewhere. But you should take any accounts you maintain elsewhere into consideration when determining whether you must file or amend a Schedule 13D or 13G and what information to include in those schedules.

 

· Alerts sent will not take into consideration your Schedule 13D or 13G filing obligations arising prior to the date of Interactive Broker's implementation of this alert program.
 

 

 

 

For Additional Information

For more information on Schedules 13D and 13G, please visit the SEC website at

http://www.sec.gov/answers/sched13.htm and

https://www.sec.gov/divisions/corpfin/guidance/reg13d-interp.htm

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