Jun. 28, 2023
Securities and Exchange Commission 100 F Street, N.E. Washington, D.C. 205499-1090 Re: Reopening of Comment Period for Modernization of Beneficial Ownership Reporting (File No. S7-06-22) Dear Securities and Exchange Commission, I am writing to express my support for the proposed amendments to the rules governing beneficial ownership reporting (File Number S7-06-22). I believe these amendments will enhance transparency and promote more accurate reporting in the securities market. I commend the Commission's efforts to modernize the filing deadlines, clarify disclosure requirements, and address the treatment of cash-settled derivative securities. Firstly, I appreciate the proposal to update the filing deadlines for initial and amended beneficial ownership reports filed on Schedules 13D and 13G. As you know, these reports are required to be filed within 10 calendar days after a beneficial owner crosses the 5% threshold. This 10-day deadline has been in effect and unchanged since 1968. Acquiring large blocks of shares secretly for such a long period of time allows these investors to trade on asymmetric price information and continue accumulating shares from unwitting investors for almost two weeks after the 5% threshold is reached. The modernization of these deadlines will ensure timely and relevant information is available to market participants, allowing for more informed decision-making. Furthermore, I agree with the clarification that holders of certain cash-settled derivative securities should be deemed beneficial owners of the reference equity securities for reporting purposes. This approach aligns reporting requirements with the economic interests involved and contributes to a more comprehensive understanding of ownership in the market. As we saw with Archegos, cash-settled derivatives are exempted from disclosure requirements because the holders of these derivatives are not considered beneficial owners. I appreciate that the proposed amendments primarily focus on reporting requirements and It is important to note that this clarification does not grant voting rights to derivative beneficiaries, as voting rights generally remain with the actual owners of the underlying stock. While beneficial ownership reporting is essential for transparency and regulatory purposes, the exercise of voting rights remains with the actual owners of the underlying stock, not with the holders of cash-settled derivatives. The proposal's aim to clarify and affirm the operation of the regulation as applied to groups formed under the Securities Exchange Act of 1934 is also commendable. I also support the proposal to amend provisions regarding the date on which Schedules 13D and 13G filings are deemed to have been made. Ensuring consistency and clarity in the determination of filing dates will contribute to a more orderly and streamlined reporting process. Lastly, I endorse the requirement to file Schedules 13D and 13G using a structured, machine-readable data language. This shift will improve data accessibility, facilitate data analysis, and enhance the overall efficiency of data processing and utilization. In conclusion, I believe that the proposed amendments to the beneficial ownership reporting rules will result in greater transparency, accuracy, and efficiency in the securities market. I commend the SEC for its efforts in addressing these important regulatory matters. Thank you for considering my comments.