SC 13D
Schedule 13D is a form that must be filed with the U.S. SEC when a person or group acquires more than 5% of a voting class of a company's equity shares. Schedule 13D must be filed within 10 days of the filer reaching a 5% stake.
SC 13D Report
Definition
The SC 13D report is a document that must be filed within ten days when an investor acquires more than 5% of a company's stock and intends to actively participate in the company's affairs, or holds more than 5% as a passive investor. The report aims to disclose the investor's holdings and intentions to the public.
Origin
The origin of the SC 13D report dates back to the 1968 amendment of Section 13(d) of the Securities Exchange Act. This amendment aimed to increase market transparency and prevent investors from manipulating the market by concealing their holding intentions.
Categories and Characteristics
The SC 13D report mainly falls into two categories: active investors and passive investors. Active investors typically detail their plans and intentions regarding the company's affairs in the report, such as nominating board members or pushing for strategic changes. Passive investors, on the other hand, hold shares primarily for investment purposes without intending to participate in the company's management.
Specific Cases
Case 1: A hedge fund purchases 6% of a tech company's shares on the open market and plans to push for a strategic restructuring. According to regulations, the hedge fund must file an SC 13D report within ten days, detailing its holdings and restructuring plans.
Case 2: A wealthy individual investor buys 5.5% of a retail company's shares but has no intention of participating in the company's management. Nevertheless, they are still required to file an SC 13D report, disclosing their holdings and investment purpose.
Common Questions
1. Do I need to file an SC 13D report if I hold less than 5% of the shares?
Answer: No, the SC 13D report is only required for holdings of more than 5%.
2. What is the deadline for filing an SC 13D report?
Answer: Investors must file the SC 13D report within ten days of acquiring more than 5% of the shares.
