Jun. 28, 2023
Dear SEC. I wanted to share some important thoughts on the Proposed Rule (S7-06-22) recently introduced by the Securities and Exchange Commission (SEC) to modernize beneficial ownership reporting. Firstly, I appreciate the SEC's efforts to update reporting requirements and enhance market transparency. Transparency and fairness are crucial for our financial markets, ensuring integrity and trust for sustainable economic growth. While I agree with the SEC's proposal to shorten the reporting period from 10 calendar days to 5 calendar days for disclosing ownership positions exceeding 5% of outstanding shares, I believe a reporting deadline of two business days would be even more effective. A shorter reporting period would reduce the chance for investors to secretly accumulate large stock positions and trade with an unfair advantage. It levels the playing field, improves market efficiency, and supports the SEC's intentions. It's important to include holders of cash-settled equity swaps in the definition of beneficial ownership. This ensures fairness and transparency by identifying those who have significant influence over a company's decisions, even if they don't directly own the shares. Including cash-settled equity swaps in determining ownership promotes fairness, prevents exploitation, and protects the integrity of the stock market. It's crucial to clarify that these swaps don't grant voting rights or control over the company, maintaining transparency and avoiding misunderstandings. Additionally, the Proposed Rule should address reporting requirements for short positions. Transparency in both long and short positions is essential for a comprehensive view of the market. Revising Rule 13f-2 would establish consistent reporting standards. In conclusion, I appreciate the SEC's efforts to modernize beneficial ownership reporting. However, I believe further improvements are necessary to protect investors' interests and maintain market integrity. Adopting a two-business-day reporting period, including cash-settled equity swaps in beneficial ownership, and addressing short position reporting would establish a robust regulatory framework that promotes fairness, transparency, and trust in our financial markets. Thank you for considering these comments and suggestions during this important rule-making process. I remain committed to supporting the SEC's mission of transparency and equality in our market. Best regards, K. Iversen