Regulators busy as SEC revises reporting timelines, FCA blocks Binance

SEC revises reporting timelines on beneficial ownership, FCA blocks Binance’s UK promotion.

Regulators in the US and UK were busy yesterday, with the SEC announcing the first revisions to reporting timelines on beneficial ownership since 1977, and the FCA blocking Binance’s attempt to market products to UK consumers on day three of a new regime.

The SEC is aiming to “improve transparency and provide more timely information for shareholders and the market” with the changes to rules on beneficial ownership reporting. Investors with stakes of more than 5% in a company will now have five days, rather than 10, to report those stakes.

“Today’s adoption updates rules that first went into effect more than 50 years ago. Frankly, these deadlines from half a century ago feel antiquated,” said SEC Chair Gary Gensler. “In our fast-paced markets, it shouldn’t take 10 days for the public to learn about an attempt to change or influence control of a public company.”

Activist investors

The move will have most impact on activist investors seeking to build stakes in secret to maximise their position.

The SEC said: “The amendments update Regulation 13D-G of Sections 13(d) and 13(g) of the Securities Exchange Act of 1934. An investor with control intent files Schedule 13D, while Exempt Investors and investors without a control intent, such as Qualified Institutional Investors and Passive Investors, file Schedule 13G.”

The amendments:

  • shorten the deadline for initial Schedule 13D filings from 10 days to five business days and require that Schedule 13D amendments be filed within two business days;
  • generally accelerate the filing deadlines for Schedule 13G beneficial ownership reports (the filing deadlines differ based on the type of filer);
  • clarify the Schedule 13D disclosure requirements with respect to derivative securities; and
  • require that Schedule 13D and 13G filings be made using a structured, machine-readable data language.

Compliance with the revised Schedule 13G filing deadlines will be required beginning on September 30, 2024. Compliance with the structured data requirement for Schedules 13D and 13G will be required on December 18, 2024. Compliance with the other rule amendments will be required upon their effectiveness.

Financial Services and Markets Act

In the UK, the FCA has used powers under section 55L of the Financial Services and Markets Act (FSMA) to block Binance’s attempt to market itself to UK consumers. We reported yesterday that the crypto firm had linked with in an attempt to comply with new marketing standards.

An announcement on the regulator’s website said that measures were being imposed on to restrict it from approving cryptoasset financial promotions. It has until the end of Wednesday October 11, 2023, to withdraw all its crypto promotions., which has expressed “disappointment” with the decision, has said it intends to appeal.

Binance has not commented on its next move, but issued a statement to crypto site Blockworks saying: “Binance has invested an enormous amount of time and resources in ensuring that is positioned to comply with the detailed requirements of the UK’s Financial Promotions Regime. We have implemented all necessary restrictions for UK users and partnered with an FCA authorized firm, Limited, in order to meet our obligations.”

When it announced the partnership, Binance said was “an FCA-regulated firm which is authorized to approve crypto marketing and communications materials as an ‘S21 approver”. That authorization has now been withdrawn, but it is unclear what prompted the FCA’s move.

Since the new regulations came into effect on Monday, the FCA has issued more than 150 alerts to companies over unauthorised promotion of crypto assets.