14 Apr 2021

On January 3, 2014, the Securities and Exchange Commission (SEC) issued new Compliance and Disclosure Interpretations (CDIs) that affect the calculation of an individual`s economic property on the holdings of other members of a “group” for specific purposes, in accordance with Section 13.1. In addition, it is not enough to justify the economic beneficiary of a group member on the actions of other group members2 Prior to the new guidelines, many practitioners and some courts represented the contrary view that each member of the group was always attributed to the ownership of shares of other members of the group. As noted above, prior to the new guide, many practitioners and at least some courts found that the mere formation of groups automatically justified the economic beneficiary of the actions of the other members of the group, in accordance with Section 13, by simply grouping. As a result, many practitioners would always report to the actual beneficiaries of the shares of each member of the group as the shares of other members of the group. The previous notice was based on guidelines in a 1991 Exchange Act4 press release, in which the SEC stated that “to determine the status of 10% holder under Section 16 of the Exchange Act, securities held by the group must be included in the calculation by each member of the group.” Section 16a-1 provides that “the term “beneficial owner” refers to any person considered to be an economic beneficiary in accordance with Section 13 (d) of the [Exchange Act] and the rules set out in it. . . .┬áRule 13d-3 (a) defines the economic beneficiary in accordance with Section 13 and, for the purposes of Section 16, as the right to vote or invest in equity securities. However, the SEC interprets the definition of economic property differently in Rule 13d-3 (a) to declare the economic beneficiary on Schedule 13Ds from the definition of who is an “economic owner 10 percent” according to Section 16. Indeed, the new CDIs explicitly acknowledge the conflict, but do not resolve it by noting that “the analysis for the purposes of Section 16 is different” and quotes the text cited above in the 1991 Exchange Act cited above. Question: If a holder who reports schedule 13D sells all his shares after a voting date, but before the date of the shareholders` meeting, and retains the right to choose the shares before the day of the meeting, when should he submit a final change to Schedule 13D to declare that he is no longer an economic owner of more than 5 percent of the value class? Answer: Yes, the titleholder is required to immediately modify its 13D calendar in order to disclose the substantial change in the information contained in item 4, as it has put in place a plan that would or could lead to the de-registration or disinscribing of the relevant securities and its existing disclosure of item 4 is no longer correct. A plan or proposal as used in point 4 is not considered valid in the event of a formal agreement or when launching an offer, invitation or similar transaction.

General disclosure, which reserves the right to participate in any of the types of transactions listed in point 4 (a) (d), must be amended where the security holder has formulated a specific intention regarding a deviant issue. See z.B. In the Matter of Tracinda Corporation, Exchange Act Release No. 58451 (September 3, 2008). [September 14, 2009] Question: Are security holders reporting separately on Schedule 13D required to change their 13D calendars if they later form a group in accordance with Section 13 (d) (3) of the Stock Exchange Act and Rule 13d-5 (b)? In order for a party to the voting agreement to be treated as owning or sharing the economic ownership of securities held by another party to the voting agreement, evidence would have to be available beyond the formation of the group covered by Article 13-5 (b).