As mentioned in previous blogs, the Dodd-Frank Wall Street Reform and Consumer Protection Act (the “Dodd-Frank Act”) had several provisions that affect small public companies, not just the exemption from Section 404(b) requirments of Sarbanes-Oxley. One of those other provisions is the granting of authority to the SEC to pass rulemaking to shorten the time period that shareholders who acquire more than 5% of a ’34 Act reporting company have to file a Form 13D or 13G, as well as shorten the time period that an person subject to Section 16 reporting requirements has to file a Form 3 regarding beneficial ownership. Currently, the time period for filing a 13D/13G and a Form 3 is 10 days from the action that made the person subject to the flling requirements. Under the provisions of the Dodd-Frank Act, the SEC is empowered to shorten those timelines through rulemaking. To date, no new dates have been established by the SEC, but that could change. From a logistical standpoint the biggest impact of this would be obtaining Edgar codes. For most people that become subject to the filing requirements of 13D/13G and/or Section 16, they have not filed reports with the SEC previously and, therefore, may not have the Edgar codes that are required to make the appropriate filings. For many, that 10-day filing period enable them to obtain Edgar codes and make the required filing(s). However, if the timeline is shortened for these filings it will be even more important for these individuals to ensure their counsel or company counsel is obtaining the codes for them prior to becoming subject to the obligations to make these filings. While the process to obtain Edgar codes is not complex, it does require an electronic submission to the SEC, followed up by a notarized document that must reach the SEC within 24-48 hours of the electronic submission, so you should allow 2-3 days to complete the process and get the Edgar codes for that inidividual.
Again, the timelines for 13D/13G and Section 16 filings have not changed, but the Dodd-Frank Act lays the groundwork for this change to occur in the future. Check back here for the latest developments
