• U.S. Senators Introduce Legislation to Tighten Schedule 13D Reporting Requirements and Increase Oversight of Activist Hedge Funds
  • April 4, 2016
  • Law Firm: Eversheds Sutherland (US) LLP - Washington Office
  • Two U.S. Senators recently introduced legislation that would result in significant changes to Schedule 13D reporting requirements. According to the press release announcing the introduction of the legislation, the proposed changes are designed to enhance transparency, protect companies from “wolf packs” (i.e., groups of activist hedge funds), and address the larger problem of “short-termism.”

    In particular, the legislation proposes to shorten the Schedule 13D filing period from 10 days to 2 days, expand the definitions of “beneficial ownership” and “person” that are relevant to Schedule 13D, and require the disclosure of “secret net short positions” on Schedule 13D (by requiring more disclosure of derivatives). If enacted, the legislation would require the SEC to amend Rule 13d-1 under the Exchange Act within one year of the date of enactment.