Proposed HSR Rule Change Would Benefit Activists

Harvard Law School Forum on Corporate Governance, the top online resource for discourse on corporate governance, recently published a client alert authored by Shareholder Activism partners  Steve Wolosky, Andrew Freedman, Ron Berenblat and Corporate partner Kenneth Silverman. The article “Proposed HSR Rule Change Would Benefit Activists” discusses the Federal Trade Commission’s proposed amendment that would create a new de minimis exemption under the Hart-Scott-Rodino Act (the “HSR Act”). This new rule would “add a new exemption, Rule 802.15 (Certain De Minimis Investments) that would exempt the acquisition of 10% or less of an issuer’s voting securities when the acquiring person does not have a competitively significant relationship with the issuer, as determined by the rules.” The article also discusses how another proposed amendment “would expand the definition of “person” under the HSR Act to include any “associates” of the person.” The article also touches on the impact and limits of the proposed rule change.