Improving Transparency Over Stock Ownership

NYSE Euronext, NIRI (National Investor Relations Institute) and the Society (Society of Corporate Secretaries & Governance Professionals) submitted a joint petition to the SEC  which focuses on the SEC’s beneficial ownership reporting rules under Section 13(f) of the Securities Exchange Act of 1934. The petition requests the SEC to reduce the time frame under which investors are required to report their holdings from 45 business days after the end of the quarter to two business days after the end of the quarter. Currently, the Exchange Act requires quarterly reporting, so a further reduction than quarterly reporting would require an act of Congress.

In addition to requesting a shortened 13(f) reporting period, the petition also encourages the SEC to raise the 13(f) beneficial ownership reporting rules with the appropriate Congressional oversight committees to establish monthly rather than quarterly reporting and advocates strong support for the SEC to review all Section 13 beneficial ownership reporting rules.

Companies have been concerned for many years about the lack of transparency into who owns their stock. Being able to communicate with shareholders has become even more important for companies today in light of recent rule changes and other activism relating to corporate governance matters (eg. say on pay, proxy access, etc.). Accelerating the filing deadline of Section 13(f) reporting will help companies, investors and the market participants overall to have access to better, more timely information. Both shareholders and companies/boards are seeking to increase the dialog over corporate governance as well as other matters, like the company’s business/strategy, etc. This petition seeks to help further along that opportunity to connect.