On July 9, the Staff of the Securities and Exchange Commission (the SEC) issued three new Corporation Finance Interpretations (CFIs) addressing disclosure obligations under Schedules 13D and 14A.

The guidance targets a specific but increasingly common activism structure: special-purpose vehicles that raise capital from investors to buy a single issuer’s securities and conduct an activism or proxy campaign. Activists who form these vehicles must now name the underlying investors in their 13D and contested proxy filings.

CFI 110.09: Investors in Company-Specific Activist Special Purpose Vehicles Must be Named in Schedule 13D

Under the guidance provided by CFI 110.09, an entity (such as a special purpose vehicle) formed specifically to raise funds to acquire the securities of a specific issuer and engage in an activism campaign at that issuer must disclose the identities of its investors under Item 3 of Schedule 13D (Source and Amount of Funds or Other Consideration). Item 3 requires reporting persons to name all parties to any transaction through which they obtained funds “for the purpose of acquiring, holding, trading or voting the securities” of the issuer. Because investors in a purpose-built vehicle contribute capital for exactly that purpose, filers must identify them in the Schedule 13D filing.

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