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SEC Proposes Changes to Beneficial Ownership Reporting

Client memorandum | February 11, 2022

On February 10, 2022, the Securities and Exchange Commission proposed extensive changes to the rules under Sections 13(d) and 13(g) of the Securities Exchange Act of 1934 (the “Exchange Act”). The proposals would bring major changes to beneficial ownership considerations surrounding cash-settled derivative securities (other than security-based swaps) and substantially expand the field of behavior that may create a “group” of two or more investors in any issuer, as well as substantially compressing the deadlines applicable to the applicable disclosures. The proposals would also impact the determination of persons subject to Section 16 of the Exchange Act, which applies to beneficial owners of, and members of groups that beneficially own, more than 10% of the outstanding shares of a registered class of equity securities. 

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