SEC Corp Fin Issues New CFI Guidance on TRS, Schedule 13D, Proxy and Crowdfunding Rules
Hedge funds, activist investors, issuers and crowdfunding sponsors must reassess Section 13 reporting, proxy disclosure and tender-offer dissemination practices following new SEC Compliance and Disclosure Interpretations.
On July 9, 2026, the SEC's Division of Corporation Finance released several Compliance and Disclosure Interpretations addressing Total Return Equity Swaps (Questions 105.08–105.10), Section 13 reporting (Questions 110.09–110.10), proxy rules (Question 155.02), Regulation Crowdfunding (Question 202.02), and tender-offer dissemination (Questions 104.03 and 131.04). The Staff confirmed that a cash-settled TRS referencing a single class of equity, without voting or acquisition rights, does not by itself create Section 13 beneficial ownership, but arrangements designed to evade reporting—particularly those directing counterparty voting or pre-arranging acquisitions—may trigger beneficial-ownership status. Activist vehicles formed to target a specific issuer must disclose all investors in Schedule 13D filings and identify investors contributing more than $500 as proxy participants. Crowdfunding issuers must continue reporting until holder counts drop below 300 or specified Rule 202(b) events occur. Tender-offer bidders may now use a press release plus active hyperlink in lieu of summary newspaper advertisements for cash-only offers. In-house counsel should review TRS documentation, activist vehicle structures, proxy disclosures, and tender-offer mechanics for compliance.