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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). The form must be submitted within 10 days by anyone who purchases greater than 5% of a company’s publicly traded securities. The document is also called and known as the Beneficial Ownership Report.

 

Schedule 13D Filing
Source: SEC Archives

 

The Schedule 13D Filing reveals the names of the large shareholders in the company and the purpose(s) of the purchase of shares. The schedule is filed with the SEC and is provided to the company issuing securities and 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.

Similar to other SEC filings, Schedule 13D can be found on 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 and Issuer

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 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

In this section, the beneficiary indicates the objective of the transaction. This part of the schedule allows investors to see whether the upcoming transaction is an acquisition, takeover, or the beneficiary 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, 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 beneficiary must disclose any agreements or relationships that s/he regarding any person related to the company.

 

7. Materials to be filed as exhibits

Contains any exhibits to be filed with the schedule are attached to this section. 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 and the purpose of the changes. Based on this information, investors can make informed investing and voting decisions.

 

Related Readings

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