Schedules 13D and 13G: who has to report owning more than 5% of a company

An investor who becomes the beneficial owner of more than 5% of certain classes of a company's shares must file a public statement called Schedule 13D. Some investors may use a shorter form, Schedule 13G, instead. Which form applies, and how fast it is due, depends on who the investor is and why they hold the shares.

Who has to file

The starting rule is simple. Any person who, after acquiring directly or indirectly the beneficial ownership of any equity security of a class which is specified in paragraph (i)(1) of this section, is directly or indirectly the beneficial owner of more than five percent of the class^[1] must file a Schedule 13D. "Beneficial owner" is the rule's term for whose ownership counts. Its full definition is in a separate rule not covered on this page.

"Equity security" has a specific meaning here. It covers any equity security of a class which is registered pursuant to section 12 of the Act^[2], plus certain insurance company and closed-end fund shares, but such term shall not include securities of a class of non-voting securities.^[2]

Three kinds of investors may file the shorter Schedule 13G instead:

1. Certain institutions. These include registered brokers and dealers, banks, insurance companies, registered investment companies, registered investment advisers, and certain employee benefit plans, among others. They qualify only if they acquired the shares in the ordinary course of the person's business and not with the purpose nor with the effect of changing or influencing the control of the issuer^[3]. The "issuer" is the company that issued the shares.
2. Passive investors. Another investor may use Schedule 13G if they have no aim of changing or influencing control, are not filing as an institution, and are not directly or indirectly the beneficial owner of 20 percent or more of the class.^[4]
3. Exempt investors. Some owners are not required to file a 13D, for example because the beneficial ownership was acquired prior to December 22, 1970^[5]. They file a Schedule 13G instead.

Investors can move between forms. A 13G filer who later holds the shares with a purpose of influencing control, and owns more than 5%, shall file a statement on Schedule 13D within five business days^[6]. A passive investor must also switch to a 13D within five business days after the date on which the person's beneficial ownership equals or exceeds 20 percent of the class of equity securities.^[7]

When it is due

A Schedule 13D is due within five business days after the date of the acquisition^[1]. A business day means any day, other than Saturday, Sunday, or a Federal holiday, from 12 a.m. to 11:59 p.m., Eastern Time.^[8]

For Schedule 13G, the deadline depends on the filer:

• Institutions file within 45 days after the end of the calendar quarter in which the person became obligated^[9] to report. If an institution's ownership exceeds 10 percent of the class of equity securities prior to the end of the calendar quarter^[9], the first 13G is due within five business days after the end of the first month^[9] in which that happens.
• Passive investors file within five business days after the date of an acquisition^[10].
• Exempt investors file within 45 days after the end of the calendar quarter in which the person became obligated to report^[11].

There is also a pause after some switches to a 13D. Until the tenth day after that 13D is filed, the investor may not vote or direct the voting of the securities described therein^[12] or acquire additional shares of the issuer.

What it shows

A filing shows that the filer reported beneficial ownership of more than 5% of a class of a company's voting equity securities.

The form type also carries information. Schedule 13G is a short-form statement^[3], and the institutional and passive routes to it are open only to filers who did not acquire the shares to change or influence control. A Schedule 13D is the standard filing for everyone else above the threshold.

Investors acting together may file once. A joint statement identifies all such persons, contains the required information with regard to each such person, indicates that such statement is filed on behalf of all such persons, and includes, as an exhibit, their agreement in writing^[13]. If group members file separately, each such filing should identify all members of the group^[14].

What it does not show

Non-voting shares. Classes of non-voting securities fall outside the definition of equity security used here, so they are not counted.

Real-time ownership. An institution's 13G reports ownership as of the last day of the calendar quarter^[9] and may be filed up to 45 days later. The figures can therefore describe a past date.

A freshly counted share total. When working out the percentage, a filer may rely upon information set forth in the issuer's most recent quarterly or annual report, and any current report subsequent thereto^[15], unless it has reason to think that information is wrong.

Verified details about every co-filer. In a joint filing, each person is not responsible for the completeness or accuracy of the information concerning the other persons making the filing, unless such person knows or has reason to believe that such information is inaccurate^[13].

How to read one

Start with the form type. A 13D and a 13G come from different routes under the rule, as described above.

Next, look at who filed. For a 13G, check whether the filer is an institution, a passive investor, or an exempt owner, because each has its own deadline.

Then compare dates. Note the date of the event being reported and the date the filing was made, keeping the relevant deadline in mind.

Check whether the filing is joint and who is named in it.

Finally, look at the filer's history. A move from a 13G to a 13D means the filer's status under the rule changed. On its own, it does not say anything about what the filer or the company will do next.

On GetSignal

In the app, each company profile lists the company's recent 13D and 13G filings among its SEC filings, each opening the filing on SEC.gov. When one of the funds listed at getsignal.finance/funds files a 13D or 13G, people who follow that fund see it in their app feed and can get a push.

This page is general information about a public disclosure rule. It is not legal or investment advice.