Understanding Schedule 13D: Filing Process & Key Requirements

Overview

Schedule 13D is an SEC filing required when a person or group acquires more than 5% of a company’s voting shares. Often called a “beneficial ownership report,” it provides transparency about large ownership stakes and signals potential changes in control, such as activist campaigns, proxy contests, mergers, or hostile takeovers.

Why it matters

• Alerts the market, the company, and other shareholders to significant changes in ownership.
• Discloses the buyer’s identity, plans, and sources of funds, enabling informed decisions by investors and boards.
• Can indicate the likelihood of strategic moves or governance challenges.

When to file

• File Schedule 13D within 10 days after acquiring more than 5% of a voting class of publicly traded securities.
• A simpler form, Schedule 13G, may be available for certain passive or qualifying institutional investors under specific conditions.
• If any material information changes (including a 1% or greater change in ownership), an amendment must be filed promptly — generally within two business days.

Key disclosure items on Schedule 13D

Schedule 13D requires detailed information organized by item:

• Item 1 — Security and Issuer: Identify the class of securities purchased and the issuer’s name and address.
• Item 2 — Identity and Background: Name and background of the reporting person(s), business type, citizenship, and recent criminal or certain civil litigation history.
• Item 3 — Source and Amount of Funds or Other Consideration: Describe how the acquisition was financed, including borrowings.
• Item 4 — Purpose of Transaction: State the purpose, including any plans or proposals related to mergers, reorganizations, liquidation, or changes in the board or management.
• Item 5 — Interest in Securities of the Issuer: List the number of shares and the percentage of outstanding shares represented by the position.
• Item 6 — Contracts, Arrangements, Understandings, or Relationships: Disclose any agreements with others regarding the issuer’s securities (e.g., voting arrangements, joint ventures, option or loan arrangements, finders’ fees).
• Item 7 — Material to be Filed as Exhibits: Attach copies of written agreements and other material documents referenced.

Amendments and material changes

• Amend Schedule 13D promptly if any material fact changes — specifically, any increase or decrease of at least 1% in the class of securities owned.
• Amended filings are typically designated as SC 13D/A in SEC filings.

Where to find filings

Schedule 13D and amended filings are publicly available through the SEC’s EDGAR database, listed as “SC 13D – General statement of acquisition of beneficial ownership” and “SC 13D/A” for amendments.

Example: IAC’s MGM stake

In August 2020, IAC/InterActiveCorp filed a Schedule 13D after acquiring 59,033,902 shares of MGM Resorts International, representing roughly a 12% ownership stake at the time. The filing identified IAC as the reporting person, disclosed the stake size, and signaled the market about IAC’s significant position in MGM.

Bottom line

Schedule 13D is a key disclosure mechanism that promotes transparency around large ownership positions and potential changes in corporate control. Investors and market participants should monitor these filings — and timely amendments — to assess ownership dynamics and strategic intentions.