C. Proposed Amendments to Rule 13d-5

In the Proposing Release, the Commission proposed to amend Rule 13d-5 to, among other things:

• Revise Rule 13d-5(b)(1) to remove the potential implication that it sets forth the exclusive legal standard for group formation under section 13(d)(3) or 13(g)(3);
• Add new paragraph (b)(1)(ii) to specify that if a person, in advance of filing a Schedule 13D, discloses to any other person that such filing will be made and such other person acquires securities in the covered class for which the Schedule 13D will be filed, those persons will have formed a group within the meaning of section 13(d)(3); and
• Rather than adopt these amendments, we instead are issuing guidance on the operation of existing Rule 13d-5(b) and sections 13(d)(3) and 13(g)(3) that clarifies and affirms that, among other matters, two or more persons who “act as” a group for purposes of acquiring, holding, or disposing securities may be treated as a group. In addition to the foregoing, we are adopting certain amendments to Rule 13d-5 that the Commission included in the Proposing Release. Specifically, we are:
• Adding new paragraph (b)(1)(ii) to specify that a group subject to reporting obligations under section 13(d) shall be deemed to acquire any additional equity securities acquired by a member of the group after the group’s formation;
• Adding new paragraph (b)(1)(iii) to carve out from paragraph (b)(1)(ii) any intra-group transfers of equity securities;
• shall be deemed to acquire any additional equity securities acquired by a member of the group after the group’s formation;
• Adding new paragraph (b)(2)(ii) to carve out from paragraph (b)(2)(i) any intra-group transfers of equity securities;
• inclusion of these amendments, but otherwise not altering the substance of that rule; and
• Making other technical changes to Rule 13d-5.⁴⁸⁰