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B-335737 Nov 15, 2023 1 (2023-11-15)

handle is hein.gao/gaopmo0001 and id is 1 raw text is: G ; . U.S. GOVERNMENT ACCOUNTABILITY OFFICE 441 G St. N.W. Washington, DC 20548 B-335737 November 15, 2023 The Honorable Sherrod Brown Chairman The Honorable Tim Scott Ranking Member Committee on Banking, Housing, and Urban Affairs United States Senate The Honorable Patrick McHenry Chairman The Honorable Maxine Waters Ranking Member Committee on Financial Services House of Representatives Subject: Securities and Exchange Commission: Modernization of Beneficial Ownership Reporting Pursuant to section 801(a)(2)(A) of title 5, United States Code, this is our report on a major rule promulgated by the Securities and Exchange Commission (SEC) entitled Modernization of Beneficial Ownership Reporting (RIN: 3235-AM93). We received the rule on October 10, 2023. It was published in the Federal Register as a final rule and guidance on November 7, 2023. 88 Fed. Reg. 76896. The effective date is February 5, 2024. The final rule, according to SEC, adopts amendments to certain rules that govern beneficial ownership reporting. SEC stated that the amendments shorten the filing deadlines for initial and amended beneficial ownership reports filed on Schedules 13D and 13G. Also, SEC stated the amendments clarify the disclosure requirements of Schedule 13D with respect to derivative securities. Further, SEC stated it is expanding the timeframe within a given business day by which Schedules 13D and 13G filings may be made using a structured, machine-readable data language. In addition, SEC stated the rule discusses how, under the current rules, an investor's use of a cash-settled derivative security may result in the person being treated as a beneficial owner of the class of the reference equity security. SEC also stated it is providing guidance on the application of the current legal standard found in section 13(d)(3) and 13(g)(3) of the Securities Exchange Act of 1934, Pub. L. No. 73-291, 48 Stat. 881 (June 6, 1934), to certain common types of shareholder engagement activities. Finally, according to SEC, the rule makes certain technical revisions. Enclosed is our assessment of SEC's compliance with the procedural steps required by section 801(a)(1)(B)(i) through (iv) of title 5 with respect to the rule. If you have any questions about this report or wish to contact GAO officials responsible for the evaluation work relating to

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