The short version
When a person or a group ends up owning more than 5% of a class of a public company’s voting stock, they have to tell the Securities and Exchange Commission (SEC) and the public. They do it on one of two forms.
- Schedule 13D is the long form. It is for owners who may want to influence or change the company: push for a sale, replace directors, change strategy. It must say who the owner is, where the money came from and, in Item 4, what the owner plans to do.
- Schedule 13G is the short form. It is for owners who hold the shares passively, such as index fund managers, banks and insurers buying in the ordinary course of business, or investors who promise they have no plan to influence control.
Both forms are public on EDGAR, the SEC’s filing system, and both come from Section 13(d) of the Securities Exchange Act of 1934 and the SEC’s rules under it.
What counts as “owning” 5%
The test is beneficial ownership, which is broader than having shares in your own name. You are a beneficial owner if you have, or share, the power to vote the shares or the power to sell them. That can include shares held by a fund you manage or a company you control, and shares you have the right to acquire within 60 days, for example through options.
People who agree to act together, such as two funds coordinating a campaign, can count as a group. Their holdings are added up, and the group as a whole files if it crosses 5%.
The percentage is measured against the class of voting equity that is registered under the Exchange Act, which for most companies means the common stock.
Who may use the short form
Rule 13d-1 lets three kinds of owners file Schedule 13G instead of 13D.
Qualified institutional investors. Registered broker-dealers, banks, insurance companies, registered investment companies and advisers, certain employee benefit plans and similar institutions. They qualify only if they bought the shares in the ordinary course of business and not with the purpose or effect of changing or influencing control of the company. This is why large asset managers file thousands of 13Gs.
Passive investors. Anyone else who can certify that the shares were not bought or held to change or influence control, as long as they own less than 20% of the class.
Exempt investors. Holders who are above 5% but never made an acquisition covered by Section 13(d). A common case is someone who owned the stake before the company registered its stock, such as a founder.
The choice can change. If a 13G filer develops a purpose of influencing control, it has to switch to a Schedule 13D within five business days. Until the tenth day after filing that 13D, it may not vote the shares or buy more. That rule exists to stop an investor from quietly building a stake under the passive label and then turning activist overnight.
Deadlines since the 2024 changes
In October 2023 the SEC adopted amendments that shortened most of these deadlines. They took effect on February 5, 2024. The new Schedule 13G deadlines applied from September 30, 2024, and from December 18, 2024 both schedules have to be filed in a structured, machine-readable format.
| Filing | Old deadline | Current deadline |
|---|---|---|
| Schedule 13D, initial | 10 days after crossing 5% | 5 business days after crossing 5% |
| Schedule 13D, amendment | “Promptly” | 2 business days after a material change |
| Schedule 13G, passive investor, initial | 10 days | 5 business days |
| Schedule 13G, institution or exempt investor, initial | 45 days after the end of the calendar year | 45 days after the end of the calendar quarter in which it crossed 5% |
| Schedule 13G, institution above 10% | 10 days after the month-end | 5 business days after the end of the month in which it crossed 10% |
| Schedule 13G, amendment | 45 days after the calendar year | 45 days after the calendar quarter of a material change |
For 13D amendments, buying or selling 1% or more of the class is always treated as material, and smaller changes can be material too. Passive 13G filers must also file within two business days after they go above 10%, and again after any later change of more than 5%. Filings sent to EDGAR by 10:00 p.m. Eastern on a business day count as filed that day.
The shorter window matters. Under the old 10-day rule, an investor could cross 5% and keep buying for more than a week before the market knew. That gap was a main point in the long debate over the deadline.
What is inside a Schedule 13D
A 13D has a cover page for each reporting person, followed by seven items.
- Security and issuer. Which stock.
- Identity and background. Who is filing, including any past legal problems the form asks about.
- Source and amount of funds. How the purchases were paid for, such as working capital or borrowed money.
- Purpose of transaction.
- Interest in securities of the issuer. The number of shares and the percentage owned, plus trades in the past 60 days.
- Contracts and arrangements. Agreements about the shares, including options, swaps and other derivatives tied to the stock.
- Exhibits. Letters to the board, group agreements and similar documents.
Item 4, the part most people read first
Item 4 asks the filer to state the purpose of buying the stock and to describe any plans or proposals that would lead to things like:
- buying more shares or selling them,
- a merger, reorganization or liquidation,
- selling a large amount of the company’s assets,
- changing the board or management,
- changing the dividend policy or capital structure,
- changing the charter or bylaws in a way that could block a takeover,
- getting the stock delisted.
Many filers write a broad, boilerplate Item 4 that reserves the right to do almost anything. The interesting ones are specific: a named plan to nominate directors, a proposal to sell a division, or a letter to the board attached as an exhibit. Amendments that change Item 4 are worth reading closely, because they often mark the point when a quiet stake becomes a public campaign.
How to read a 13G
A 13G is short. It shows the owner, the number of shares, the percentage and how voting and selling power are split, plus a certification. Institutions certify that they bought in the ordinary course of business. Passive investors certify that they have no control purpose.
On its own, a 13G from a large index fund manager says little about any single company. These managers own more than 5% of many companies because their funds track indexes. A 13G from a smaller, concentrated fund can be more interesting, since it shows a deliberate bet, but it still comes with a promise not to push for change.
How WallStPal shows these filings
Our 5% stakes page lists new Schedule 13D and 13G filings from the past 12 months, separated into active owners (13D) and passive owners (13G). For 13Ds, “Why they bought” opens the purpose the filer gave in Item 4. The stake shown is the largest percentage reported by any one person on the filing.
Large owners can also appear in other data on this site. An owner above 10% becomes a Section 16 insider and files Form 4 for each trade, which you can follow on our insider trades pages. Fund managers who also file 13F reports show up on our funds pages.
Where the rule comes from
- Section 13(d) of the Securities Exchange Act, at 15 U.S.C. 78m.
- Rule 13d-1 (who files which schedule, and when) and Rule 13d-2 (amendments).
- The text of Schedule 13D, including Item 4.
- The SEC’s October 2023 announcement of the amendments, and a summary of old and new deadlines from Loeb & Loeb.
Examples
Pershing Square, Valeant and Allergan, 2014. In April 2014, Bill Ackman’s Pershing Square filed a Schedule 13D jointly with Valeant Pharmaceuticals, reporting a stake of about 9.7% in Allergan, much of it held through options and forward contracts. The filing said Valeant planned to propose a merger with Allergan, and that Pershing Square intended to talk with Allergan’s management and board. The stake had been built during the old 10-day window, and the case was widely discussed in debates over whether that window was too long, as in this Harvard Law School Forum post.
Elon Musk and Twitter, 2022. Musk crossed 5% of Twitter’s stock in March 2022. Under the rules then in force, his report was due by March 24. He filed a Schedule 13G, claiming to be a passive investor, on April 4, 2022, and switched to a Schedule 13D the next day. In January 2025 the SEC sued him, alleging the report was 11 days late and that he paid at least $150 million less for shares bought in the meantime than he would have if the stake had been disclosed on time, as Cooley and PBS NewsHour reported. Musk’s lawyer called the suit a “sham.”
Explain it like I’m 13
Suppose a school club has 100 members’ worth of votes, and you collect more than 5 of them. The rule says you must raise your hand and tell everyone.
If you might want to change how the club is run, you fill out the long form, the 13D, and you have to explain your plans. If you just like being a member and promise not to stir things up, you can fill out the short form, the 13G. And if you change your mind and decide to shake things up after all, you have to switch to the long form and wait a few days before you use your votes.
Questions about this guide? Pal reads it with you and answers in plain English.
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