a. Proposed Amendments
The Commission proposed to amend Rule 13d-5 to expressly impute acquisitions made by a group member after the date of group formation to the group once the collective beneficial ownership among group members exceeds five percent of a covered class.566 Specifically, proposed Rule 13d-5(b)(1)(iii) would provide that a group under section 13(d)(3) will be deemed to have acquired beneficial ownership of equity securities of a covered class if any member of the group becomes the beneficial owner of additional equity securities of such covered class after the date of the group’s formation. Similarly, proposed Rule 13d-5(b)(2)(ii) would contain nearly identical language, with conforming changes to address circumstances in which a member of a group under section 13(g)(3) becomes the beneficial owner of additional equity securities of a covered class after the date of the group’s formation. The Commission noted that absent an express provision that would treat post-formation acquisitions of beneficial ownership by group members as acquisitions by the group, the Commission or other affected parties must prove the acquisition is attributable to the group.567
b. Comments Received
The Commission did not receive any comments on proposed Rule 13d-5(b)(1)(iii) and (b)(2)(ii).
c. Final Amendments
For the reasons set forth in the Proposing Release,568 we are adopting the text of Rule 13d-5(b)(1)(iii) and (b)(2)(ii) substantially as proposed. We also are redesignating these provisions as Rule 13d-5(b)(1)(ii) and (b)(2)(i) and slightly modifying them to account for the possibility that group members may make acquisitions in furtherance of the group’s common purpose on the same day the group has been formed. Accordingly, the rule text will now attribute acquisitions by group members to the group at any time after the group has been formed rather than after the date on which the group has been formed.