As I earlier noted, on June 23rd, I moderated a teleconference on proposals to shorten the Section 13(d) reporting period, currently fixed by statute and regulation at 10 days.  If you don't mind registering with Proxy Mosaic, you can listen to the program.  The link is here.

The discussion was lively–as you might well imagine, given that one of the participants represents activist shareholders and the other represents public companies.  A number of interesting things emerged in the discussion, many (most) of which also have been raised in other public forums on Schedule 13D, including those referenced and summarized here, here, and here, among other places.

• Exactly how does the Section 1d(d) reporting requirement protect investors or maintain market integrity or encourage capital formation?  Or is it just a hat-tipping system to warn issuers about potential hostile changes of control, chilling the potential for the market for corporate control to run its natural course?  Of course, the answer to many questions about Section 13(d) depends on our understanding of the policy interests being served.  It's hard to tinker with the reporting  system if we cannot agree on the objectives it seeks to achieve . . . .  (Read the remaining bullets with this in mind.)
• We're not in the 1960s, 1970s, or 1980s any more.  If market accumulations are deemed to present dangers to investors today (and that case needs to be made), why are they not just an accepted risk of public market participation?  Shouldn't every investor know that market accumulations are a risk of owning publicly traded securities?  And how does the reporting requirement really protect them from harm?  Is this just over-regulation that treats investors as nitwits?
• Not all activist investors are the same.   Some act or desire to act as a Section 13(d) group; others don't.   Some seek effective or actual control of an issuer; some don't.
• Provisions within the Section 13(d) filing requirements interact.  So, can we really talk about decreasing disclosure time periods without also talking about triggering thresholds and mandatory disclosure requirements?
• Why is 5% beneficial ownership the triggering threshold for reporting?  What's the magic in that number–and if it were to be changed, should it be lower or higher?
• Schedule 13D is a disclosure form fraught with complexity.   Many important judgment calls may have to be made in completing the required disclosures accurately and completely, depending on the circumstances.  Is all this complexity needed?  In particular, can the Item 4 disclosure requirement be simplified?  And is the group concept necessary?
• What is the value, if any, in looking at the issue from a comparative global regulatory viewpoint?  Toward the end of the call, international comparisons were increasingly being made and used as evidence that a change in U.S. regulation is needed or desirable.  But are other markets and systems of regulation enough like ours for these comparisons to work?  E.g., although other countries require Schedule 13D-like filings fewer days after attainment of a triggering threshold of ownership, does that mean we also should reduce the time period for mandatory disclosure here in the U.S.?

Lots of questions; I am beginning to think through answers.  Regardless there's much food for thought here.  Any reactions?  What do you think, and why?