SEC issues new guidance for activist fund managers

On July 9, 2026, the US Securities and Exchange Commission’s (SEC) Division of Corporation Finance (the Division) issued new Corporation Finance Interpretations that reflect the Division’s interpretation of disclosure requirements pursuant to Schedule 13D and Schedule 14A of the relevant proxy rules.

Schedule 13D

The Division’s interpretation states that the identities of the investors in an entity must be disclosed in Item 3 of Schedule 13D if (i) the entity was formed for the purpose of acquiring securities of a specific issuer, (ii) the reporting persons are engaging in an activism campaign at that issuer, and (iii) the investors are informed in advance of the specific purpose for which their funds will be used, including the identity of the targeted issuer. See Question 110.09.

Schedule 14A

The Division’s interpretation states that investors in an entity must be disclosed as a “participant” in a proxy statement or related proxy soliciting materials under Instruction 3(a)(iv) to Item 4 of Schedule 14A if the entity is (i) formed for the purpose of acquiring securities of a specific registrant and engaging in a proxy solicitation to change the composition of the registrant’s board of directors and (ii) investors in the entity are informed in advance of the specific purpose for which their funds will be used, including the identity of the targeted registrant and the purpose of the planned proxy solicitation. See Question 155.02.

Total Return Swaps

The Division’s interpretation states that a standard total return equity swap that settles exclusively in cash, only refers to a class of equity securities (as described in Rule 13d-1(i)(1)) for purposes of identifying a reference security and otherwise does not confer any voting or investment power with respect to – or any right to acquire – such class do not confer beneficial ownership for purposes of Section 13(d) and Rule 13d-3. See Questions 105.08 and 105.09.

Investment advisers considering activism campaigns or proxy solicitations, particularly those raising capital, are encouraged to contact either of the authors with any questions.