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January 10, 2025

Beneficial Ownership Reporting: New Machine-Readable Filing Requirements

I must admit that sometimes I feel like the SEC is really trying to make it hard on us all from a technology perspective. In an ever-expanding effort to satisfy some perceived demands for data from SEC filings, we have endured several decades of complicating what otherwise should be the simple process of submitting an electronic filing that reports the information that the SEC requires to be provided to investors. My latest gripe is with the recently implemented requirement that beneficial ownership reports be submitted in a machine-readable format, rather than as an HTML or ASCII document.

Beginning on December 18, 2024, beneficial ownership reports on Schedule 13D and Schedule 13G were required to be filed with the SEC using a structured, machine-readable XML-based language. This change was adopted as part of the SEC’s Modernization of Beneficial Ownership Reporting rule amendments back in October 2023. In the adopting release, the SEC noted “[t]his requirement is intended to make it easier for investors and other market participants to access, compile, and analyze information that is disclosed on Schedules 13D and 13G.” The XML-based interface is similar to what has been implemented for Form 13F, Form D and Section 16 reports.

The key takeaway here when filing a Schedule 13D or 13G is that you can no longer just send a Word document to the filing service and have them submit the filing on EDGAR soon thereafter. Instead, you will need to complete a worksheet that the filing service provides, which can take more time and effort to complete, particularly when you have a complicated beneficial ownership report. It is best to build in some extra time for this process as everyone gets used to the new interface.

– Dave Lynn