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Proposed Amendments to HSR Rules Could Fundamentally Change HSR Compliance for Asset Managers

Antitrust and Competition Law Alert® | October 5, 2020

The Federal Trade Commission recently proposed fundamental changes to the reporting requirements under the Hart-Scott-Rodino Act that would significantly increase the compliance burden for asset managers and the companies in which they are invested.  Under the proposal, an asset manager would be required to aggregate holdings in an issuer across all of its managed funds to determine whether HSR filing thresholds are met.  While the FTC also proposed a new de minimis exemption that would allow both active and passive investors to acquire up to 10% of the voting shares of an issuer, the proposed rule includes significant carve-outs that likely make the exemption unusable in practice for many asset managers.  If implemented in their current form, the proposed rules would result in many more HSR filings by asset managers and the companies in which they are invested, often for small incremental investments that are unlikely to present any antitrust issues.  The implications are significant, as HSR filings create both financial and timing burdens.

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