SEC Clarifies Relationship Between Exchange Act and Hart-Scott-Rodino

The SEC Division of Corporate Finance updated the Compliance and Disclosure Interpretations (the "C&DIs") for beneficial ownership reporting. The updates clarify an exemption in the Hart-Scott-Rodino (the "HSR") Act.

The C&DIs state that even if a shareholder may rely on an exemption from the notification and waiting period provisions in the HSR Act, the shareholder is not necessarily disqualified from initially reporting, or continuing to report, beneficial ownership on the Securities Exchange Act's Schedule 13G. According to the C&DIs, eligibility to use Schedule 13G will depend on, among other things, whether the shareholder acquired or is holding equity securities with the purpose or effect of changing or influencing control of the issuer.