We have noted the trend that the Corp Fin Staff is answering more no-action and interpretive requests on a variety of topics these days, as well as putting out new and revised Compliance and Disclosure Interpretations at a steady pace over the course of the past year. Consistent with this recent trend, the Staff of the Office of Mergers and Acquisitions recently issued an interpretive letter addressing whether the parties to an over-the-counter derivatives contracts referencing equity or other securities would be deemed a “group” for the purposes of Section 13(d)(1) or Section 13(g)(1) of the Exchange Act. The interpretive request was submitted by O’Melveny on behalf of Bank of America and affiliates. As this O’Melveny alert notes:

On January 23, 2026, the staff (the “Staff”) of the Office of Mergers and Acquisitions in the U.S. Securities and Exchange Commission’s (the “SEC”) Division of Corporation Finance issued an interpretive letter to Bank of America, N.A. and its affiliates (collectively, “BofA”) clarifying that the entry by BofA and a sophisticated counterparty into over-the-counter (“OTC”) derivative contracts in the ordinary course of business, without more, is not a sufficient legal basis to deem the parties a reporting “group” (i.e., single person for purposes of calculating beneficial ownership) pursuant to Section 13(d)(1) or Section 13(g)(1) of the Securities Exchange Act of 1934 (the “Exchange Act”).

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Prior to the BofA Letter, there existed substantial uncertainty as to whether parties to a derivative contract would be considered to be “acting as” a “group” for purposes of Section 13(d)(1) or Section 13(g)(1) of the Exchange Act as a result of entering into the contract. If the parties were deemed to be a reporting group, such group would beneficially own all of the shares of the class of securities underlying the derivative contract owned by each of the group members, thereby causing each of the parties: (i) if the group owned more than 5% of the outstanding class of securities, to become subject to reporting under Sections 13(d) or 13(g) of the Exchange Act, and (ii) if the group owned more than 10% of the outstanding class of securities, to be individually subject to Section 16 of the Exchange Act.

The Staff indicated in its response that it would not object to any determination by a financial institution that it does not “act as” a “group” with any counterparty to an OTC derivative and that, therefore, the institution together would not be required to aggregate ownership as a single “person,” solely as a consequence of entering into an OTC derivative contract, based on the representations provided by Bank of America in the request, which are generally applicable to ordinary course OTC derivative transactions.

The O’Melveny alert notes that this the interpretive letter is the sixth example of Staff interpretive guidance obtained by O’Melveny and BofA in the context of OTC derivatives since 2011. Shoutout to my former Corp Fin colleague Rob Plesnarski for all of his great work in this area!

– Dave Lynn