June 27, 2023
I am writing to you today to express my concern with proposed new Rule 13d-3(e). Which intends that a holder of a cash-settled derivative security will be deemed the beneficial owner of the reference equity securities if the derivative is held with the purpose or effect of changing or influencing the control of the issuer of the reference securities.
Currently, the concept of beneficial owner encompasses those who, directly or indirectly, acquire voting rights or the right to dispose of the issuers securities. Those who hold derivatives entitling them to the economic exposure to a covered class should not be considered beneficial owners for the purpose of voting rights.
Allowing voting rights on derivatives holders undermines the rights of bona fide shareholders to have a say in corporate governance.
If derivative holders want to vote on matters of corporate governance, they should be required to exercise that right through and only through direct beneficial ownership of the underlying security.
Thank you for your time.
Keagan Donahue