Corp Fin Issues New CFIs

On July 9, 2026, the SEC’s Division of Corporation Finance issued a number of interpretations covering a variety of topics:

Total Return Equity Swaps

Question 105.08: The Staff confirmed the commonly held view that a total return equity swap that: (i) settles exclusively in cash; (ii) only refers to a specified class of equity securities as a reference security; and (iii) does not confer voting or investment power with respect to, or any right to acquire, the reference security (TRS), does not constitute Section 13 beneficial ownership of the reference securities, including any equity securities the counterparty may acquire or hold for hedging purposes. Entry into a TRS does not, by itself, evidence a plan or scheme to evade Section 13 beneficial ownership obligations (as discussed below).

Question 105.09: A person may be deemed to be a Section 13 beneficial owner of equity securities if the person uses an arrangement with the purpose or effect of preventing the vesting of beneficial ownership as part of a plan or scheme to evade the reporting requirements of Section 13(d) or 13(g). To be part of such a plan or scheme, a TRS would need to be directly or indirectly used in connection with an “arrangement” to prevent the vesting of beneficial ownership by the purchaser.¹

Question 105.10: With respect to a TRS, the inquiry with respect to a “plan or scheme to evade” focuses on whether the person knew or was reckless in not knowing that use of the TRS would create a false appearance or illusion that the person’s interest is economic alone.²

Section 13 Reporting Obligations

Question 110.09: Where: (i) an entity is formed to raise funds to acquire securities of a specific issuer and engage in an activism campaign at that issuer; and (ii) prospective investors are informed in advance of the specific purpose for which their funds will be used, including the identity of the targeted issuer, the identities of all of the entity’s investors must be disclosed in any Schedule 13D filed by that entity.³

Question 110.10: Instruction C to Schedule 13D lists the persons and entities in addition to the reporting person as to which Items 2 through 6 information must be provided when the reporting person is not a natural person. It is not intended to limit or substitute the information required by those Items as to the reporting person itself.

Proxy Rules

Question 155.02: Where: (i) an entity is formed to raise funds to acquire securities of a specific issuer and engage in a proxy solicitation to change the composition of the issuer’s board at its upcoming shareholder meeting; and (ii) prospective investors in the entity are informed in advance of the specific purpose for which their funds will be used, including the identity of the target and the purpose of the planned proxy solicitation, each investor that invested more than $500 in the entity are “participants” under Instruction 3(a)(iv) to Item 4 of Schedule 14A (a “person who finances or joins with another to finance the solicitation of proxies, except persons who contribute not more than $500 and who are not otherwise participants”) and their identities must be disclosed in the proxy statement.

Regulation Crowdfunding

Question 202.02: The reporting obligations of an issuer who conducted a compliant Regulation Crowdfunding offering using a crowdfunding vehicle continue until there are fewer than 300 holders of record who invested in the offering, or at least one of the events in Rule 202(b)(1), (3), (4), or (5) has occurred.⁴

Tender Offer Dissemination Rules

Question 104.03 and Question 131.04: Exchange Act Rules 13e-4(e)(1) (issuer tender offers) and 14(d)-4(a) (third-party tender offers) list three methods to publish, send, or give the disclosure required by Rule 13e-4(d) and Rule 14d-6, respectively, to security holders for a tender offer in which the consideration offered consists solely of cash and/or exempt securities. This requirement may be satisfied by issuing a press release (instead of the summary newspaper advertisement contemplated by the Rules) as soon as practicable on the tender offer’s commencement date through a widely disseminated news or wire service, which contains the disclosure required by Rule 13e-4(d)(3) or Rule 14d-6(d)(2), as applicable, as well as an active hyperlink to a website address where security holders may access the tender offer materials, letter of transmittal (if any), and any other documents relating to the offer, provided that: (i) the tender offer is not subject to Rule 13e-3; and (ii) the issuer or bidder, as applicable, mails or otherwise furnishes promptly the tender offer materials to any security holder who requests such tender offer materials pursuant to the press release or otherwise.

© Arnold & Porter Kaye Scholer LLP 2026 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.