1) What are SEC forms Schedule 13D and Schedule 13G?
Schedule 13D (13D) and Schedule 13G (13G) are similar forms that are both used to disclose a party’s ownership of more than 5% of a class of equity security in a company. Both forms are used as an indicator when there is a large, rapid aggregation of securities that might represent a material shift in corporate control.
13D is considered a “long-form” beneficial ownership statement, and contains more details about the intentions of the securities holder. 13G is considered "short-form", and contains less information than a 13D.
2) What are the filing requirements for a 13D?
Any person who, either directly or indirectly, becomes the beneficial owner* of more than 5% of a company’s outstanding securities is required to file a 13D within ten days after the triggering acquisition. This does not include acquisitions made by means of a registration statement, any acquisition that does not exceed 2% of the entire class of securities in a 12-month period, or securities acquired by their own issuer.
*In this context, a beneficial owner is defined as the party who has "the ability to control or influence the voting or disposition of the securities."
3) What information is disclosed on a 13D?
4) What are the filing requirements for a 13G?
Beneficial owners that meet the SEC's exemption requirements may file a 13G in lieu of a 13D. Those exemptions include qualified institutional investors, passive investors, and exempt investors, who are each subject to specific filing requirements.
5) What information is disclosed on a 13G?
6) Can these filings be amended?
Yes, when a material change occurs in the facts set forth in one of these filings, including any material change in the percentage of the class beneficially owned, the party who filed the disclosure must promptly file an updating amendment with the SEC outlining such a change.
A 13G filer is required to file an annual amendment within 45 days after the end of the calendar year to report any changes from the previously disclosed filing. If there have been no changes (or if the changes are limited to a change in the percentage owned by the filing party resulting solely from a change in the aggregate number of securities outstanding), then no amendment is required.
7) When would a beneficial owner need to switch to filing the other type of form?
Any beneficial owner who intends to switch from filing a 13D to a 13G must meet the requirements and qualifications for filing a 13G. When a security holder was previously only eligible to file a 13D and reports its holdings fell below 5%, then the holder may qualify to file a 13G if it’s beneficial ownership increases above the threshold.
A beneficial owner who has previously filed a 13G must instead file a 13D if they intend to influence control of the issuer or engage in any transaction to that end.
8) Does a holder of more than 5% of derivative securities of an issuer need to file a 13D/G?
Yes, derivative securities which grant a right to acquire an equity security also may trigger a 13D/G reporting event.
9) Are non-U.S. beneficial owners required to make these filings?
Yes, all beneficial owners are subject to the disclosure requirements. Additionally, foreign institutions are allowed to file as qualified institutional investors.
For more detailed information on Schedule 13D/G Disclosures, please refer to the following external links: