The US Securities and Exchange Commission’s changes mark an update to half-century-old regulations which officials said have not kept pace with changes in market technology, SEC officials said.
The SEC proposal, first broached in 2022, angered some activist investors who claimed that having to step forward sooner could make it unprofitable to build the ownership positions they need for successful takeover campaigns.
As adopted, the rule would also shorten the disclosure deadline for certain institutional investors to 45 days from the end of the quarter in which their ownership stake surpasses 5%. Previously the deadline was 45 days from the end of the calendar year.
In advance of the announcement, SEC officials told reporters the final rule had been softened in important ways from the original proposal. It had initially called for investors seeking control of a company to reveal within five calendar days, rather than business days, that they had purchased 5% or more of a company’s shares.
Additionally, the initial proposal would have required certain institutional investors — meaning companies that make bulk investments on behalf of others such as pension funds — to disclose stakes of 5% or more within five business days from a month’s end, rather than 45 days from the end of the quarter.
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