The US Securities and Exchange Commission has issued new guidance clarifying beneficial ownership reporting, focusing on cash-settled total return swaps and activist funding structures to combat evasion and increase transparency.
The US Securities and Exchange Commission has sharpened its guidance on beneficial ownership reporting, issuing fresh Corporation Finance interpretations on 10 July that focus on cash-settled total return swaps, activist funding structures and disclosure mechanics under Schedule 13D, according to the SEC’s updated staff guidance page. The agency said the latest changes were added to its Exchange Act Sections 13(d) and 13(g) and Regulation 13D-G interpretations, which were last updated on 9 July 2026. (sec.gov)
At the centre of the revisions is the SEC’s view that a standard total return equity swap settled only in cash does not, by itself, make the purchaser a beneficial owner of the reference securities, even if the counterparty hedges its exposure by holding the underlying shares. But the staff also drew a clear line around evasive conduct: if the swap is used as part of an arrangement designed to avoid the vesting of beneficial ownership, the holder may still be deemed an owner for reporting purposes. The interpretations describe that kind of “plan or scheme” as one in which the person knew, or was reckless in not knowing, that the structure would create a false appearance that the interest was merely economic. (sec.gov)
The SEC also expanded on disclosure expectations for activist vehicles. Where an entity is created specifically to raise money to buy an issuer’s securities and pursue an activism campaign, and prospective investors are told in advance why the money is being raised and which issuer is targeted, the identities of all investors must be disclosed in a Schedule 13D if the entity has to file one. The staff gave a similar answer for partnerships, saying that when the reporting person is a partnership rather than a natural person, Schedule 13D requires the disclosure of other relevant persons and entities, such as general partners. (sec.gov)
The new interpretations build on a broader SEC push to tighten and clarify beneficial ownership reporting. In July 2025, the Division of Corporation Finance revised a wide range of questions across Sections 101, 103, 104, 105, 107 and 110 of its C&DIs, while the Commission’s October 2023 rule amendments accelerated filing deadlines and required structured, machine-readable reporting. The latest move suggests the regulator remains particularly focused on derivatives, activist financing and disclosure structures that can obscure who really controls a stake in a public company. (dart.deloitte.com)
- https://www.lexblog.com/2026/07/10/new-corporation-finance-interpretations-on-beneficial-ownership-reporting-and-other-topics/ – Please view link – unable to able to access data
- https://dart.deloitte.com/USDART/home/news/all-news/2026/jul/sec-releases-new-cfis – On July 10, 2026, the SEC released new Corporation Finance Interpretations (CFIs) addressing beneficial ownership reporting, including guidance on total return equity swaps (TRS). The CFIs clarify that entering into a standard TRS that settles exclusively in cash and refers to a class of equity securities does not, by itself, confer beneficial ownership of the reference security. However, if the TRS is part of an arrangement to evade reporting obligations, the holder may be deemed a beneficial owner. The CFIs also provide guidance on Schedule 13D disclosures for entities formed to acquire securities and engage in proxy solicitations.
- https://dart.deloitte.com/USDART/home/news/all-news/2025/jul/sec-update-cdis-beneficial-ownership-reporting – In July 2025, the SEC updated its Compliance and Disclosure Interpretations (C&DIs) related to Exchange Act Sections 13(d) and 13(g), as well as Regulation 13D-G, which govern beneficial ownership reporting. The updates revised questions in Sections 101 (general applicability), 103 (filing of Schedules 13D and 13G), 104 (filing of amendments to Schedules 13D and 13G), 105 (determination of beneficial ownership), 107 (acquisition of securities), and 110 (Schedule 13D), providing further clarity on reporting requirements and interpretations.
- https://www.sec.gov/rules-regulations/staff-guidance/corporation-finance-interpretations/exchange-act-sections-13d-13g-regulation-13d-g-beneficial-ownership-reporting – The SEC’s Division of Corporation Finance provides interpretations of Exchange Act Sections 13(d) and 13(g), and Regulation 13D-G, which pertain to beneficial ownership reporting. These interpretations offer guidance on various aspects, including the determination of beneficial ownership, filing requirements for Schedules 13D and 13G, and the application of these rules to different securities and transactions, such as cash-settled derivatives like total return equity swaps.
- https://www.dwpv.com/en/insights/publications/2023/sec-amends-beneficial-ownership-reporting-rules – On October 10, 2023, the SEC adopted final amendments to the rules governing beneficial ownership reporting, including clarifications on the application of these rules to cash-settled derivative securities like total return swaps. The amendments require holders of such derivatives to disclose their beneficial ownership of the reference equity securities under certain conditions, aligning with the SEC’s broader efforts to modernize and enhance transparency in beneficial ownership reporting.
- https://www.dlapiper.com/en-pr/insights/publications/2023/10/sec-amends-beneficial-ownership-reporting-rules – In October 2023, the SEC amended Regulation 13D-G under the Securities Exchange Act of 1934, providing further guidance on beneficial ownership reporting. The amendments shorten the deadlines for Schedule 13D and 13G filings and require filings to be made in a structured, machine-readable data language. The SEC also clarified the disclosure requirements for cash-settled derivative securities, including total return swaps, and provided guidance on when investors in such derivatives are considered beneficial owners of the reference equity securities.
- https://www.cov.com/-/media/files/corporate/publications/2023/11/changes-to-sec-beneficial-ownership-reporting-requirements.pdf – This publication discusses the SEC’s amendments to beneficial ownership reporting rules, focusing on cash-settled equity derivatives like total return swaps. It explains that such derivatives entitle a party to a cash amount representing the economic return on the underlying equity security but do not confer voting or investment power. The publication also discusses the SEC’s guidance on when holders of these derivatives are deemed beneficial owners of the underlying equity securities.
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emerged. We’ve since applied our fact-checking process to the final narrative, based on the criteria listed
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warrant further investigation.
Freshness check
Score:
10
Notes:
The article reports on the SEC’s release of new Corporation Finance Interpretations (CFIs) on July 10, 2026, which is the most recent and relevant information available. No evidence of recycled or outdated content was found.
Quotes check
Score:
10
Notes:
The article does not contain any direct quotes, ensuring originality and avoiding potential issues with reused or unverifiable statements.
Source reliability
Score:
10
Notes:
The article is published on LexBlog, a reputable platform known for legal and financial news. The information aligns with official SEC releases and is corroborated by other reputable sources, such as Deloitte’s DART and Reuters.
Plausibility check
Score:
10
Notes:
The claims made in the article are consistent with known SEC activities and recent regulatory updates. The focus on beneficial ownership reporting and related topics is plausible and relevant to current financial regulations.
Overall assessment
Verdict (FAIL, OPEN, PASS): PASS
Confidence (LOW, MEDIUM, HIGH): HIGH
Summary:
The article provides accurate and up-to-date information on the SEC’s recent CFIs regarding beneficial ownership reporting and related topics. It is well-sourced, free from recycled content, and does not contain unverifiable quotes. The content is factual and suitable for publication.