Schedule 13D

"Beneficial Ownership Report"

What is the Schedule 13D Filing?

The Schedule 13D Filing is required under Rule 13D of the U.S. Securities and Exchange Commission (SEC). Anyone who purchases more than 5% of a company’s publicly traded securities must submit the form to the SEC. The document is also called the Beneficial Ownership Report.

Schedule 13D Filing
Source: SEC Archives

The Schedule 13D Filing reveals the names of the large shareholders in a company and the purpose(s) of the purchase of shares. The document is provided to the company issuing securities and to the exchanges where the security is traded.

The SEC also requires a prompt amendment for any material changes disclosed in the schedule. A filer must promptly update the Schedule 13D to reflect any material change, such as a significant increase in the percentage of the company’s outstanding shares that they own.

Similar to other SEC filings, Schedule 13D can be found on the EDGAR database. In the database, Form 13D can be found under the title “SC 13D – General statement of acquisition of beneficial ownership.” SC13D/A is the amended version of the filing.

Sections of the Schedule 13D Filing

Schedule 13D includes seven sections:

1. Security, Issuer, and Owner

Basic information on the type and class of the security and the contact information of the security’s owner.

2. Identity and Background

Background Information of the owner, and references to any involvement in past criminal activity.

3. The Amount and Source of Funds or Other Considerations

Information about the origin of the money for the transaction.

4. Purpose of Transaction

Here, the shareholder indicates the objective of the transaction. The section allows investors to see whether the upcoming transaction is an acquisition, takeover, or if the shareholder simply believes that the company’s shares are undervalued.

5. Interest in Securities of the Issuer

An express overview of the purpose of the transaction, the section notes the number of acquired shares, and the ownership percentage it represents.

6. Contracts, Arrangements, Understandings or Relationships with Respect to the Securities of the Issuer

In this part of the schedule, the buyer must disclose any agreements or relationships that they have with any person related to the company.

7. Materials to be Filed as Exhibits

Contains any exhibits to be filed with the schedule. One example would be a letter to management, in the event of a hostile takeover.

Importance of Schedule 13D

The Schedule 13D Filing provides information to investors relating to the changes in the ownership of a company’s equity and the purpose of the changes. Based on this information, investors can make informed investing and voting decisions.

Related Readings

Thank you for reading  CFI’s explanation of Schedule 13D. CFI offers a wide range of courses in accounting, financial analysis, and financial modeling, including the global Financial Modeling & Valuation Analyst (FMVA)™ certification program. To help you advance your career, check out the additional CFI resources listed below:

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