Zhao Chen picked up the phone, flipped to the number Lin Shicheng, and dialed it.
The phone rang twice and was connected.
"Lawyer Lin, I have a question."
Zhao Chen put the phone on the coffee table and pressed the hands-free button.
"Era Vanguard currently holds 6.07% of the shares of Tesla.
We plan to continue to increase our holdings to 9.9% in the next half month. What are the disclosure obligations in this process?"
The voice of Lin Shicheng came from the receiver, clear and steady.
"Mr. Zhao, let me explain this problem in detail."
"First of all, you are currently reporting on Schedule 13G as a passive investor.
In this capacity, your disclosure obligations depend on changes in shareholding."
The sound of flipping documents came from the other end of the phone. Lin Shicheng was obviously confirming the latest rules and regulations.
"Under SEC rules, passive investors are required to submit amendments when there is a 'material change' in their shareholding ratio.
What is a major change? The rules clearly state that an increase or decrease in holdings by 1% or more is considered a major change."
Zhao Chen's fingers tapped lightly on the armrest of the sofa twice.
"In other words, every time I increase my holdings by 1%, I need to disclose it?"
"Yes." Lin Shicheng replied, "But there is a time window issue.
Amendments from passive investors do not need to be submitted on the day of the increase. Rules allow submission within 45 days of the end of the quarter."
Zhang Qingxue asked from the side, "So if I buy 7% from 6% today, don't I need to announce it immediately?"
Lin Shicheng said, "No. You have 45 days after the end of the quarter to put all the changes together and submit an amendment.
For example, if you increase your holdings from 6% to 9.9% and experience a 3.9% change, you only need to submit an amendment after the end of the quarter to disclose the final shareholding ratio."
Zhao Chen thought for a while. "In other words, I can buy every day during this half month and wait until April to make a unified disclosure?"
"Exactly." Lin Shicheng said, "But there is a detail that needs to be noted - if your shareholding ratio exceeds 10%, the rules are different.
After it exceeds 10%, you need to submit an amendment within 5 working days after the end of the month, and if the increase or decrease exceeds 5%, a faster disclosure is required."
Zhao Chen nodded. "So if we control it within 9.9%, we will hardly face regulatory risks?"
Lin Shicheng smiled. "Yes. Within 9.9%, you only need to submit an amendment once within 45 days of the quarter end.
This time window is wide enough and will not affect your operating rhythm at all."
Su Wantang asked softly from the side:
"What if during the process of increasing our holdings, the buying volume on a certain day is particularly large, causing the holdings to increase by more than 1% on that day? For example, buying 7.6% directly from 6.5%?"
Lin Shicheng replied, "The same rules for quarterly disclosure apply.
Regardless of whether you increase your holdings by 1% at once or in ten installments, as long as the total shareholding ratio does not exceed 10%, the disclosure time limit is 45 days after the end of the quarter.
But there is one thing - if a certain increase in holdings allows you to directly buy 10.5% from 9.5%, then the above 10% rule will be triggered.
So it is recommended that you slow down the pace when it is close to 10% and control it accurately."
Zhao Chen leaned on the sofa, feeling at ease.
The half-month holding window does not require temporary disclosure and only needs to be reported once after the end of the quarter.
This rhythm is completely within his control.
"Lawyer Lin," Zhao Chen asked another question,
"What about reducing my holdings? If I want to reduce my holdings in the future, will the rules be the same?"
Lin Shicheng said, "For passive investors, the 1% major change standard also applies to reduction of holdings.
That is, if you reduce your holdings by more than 1%, you need to submit an amendment within 45 days after the end of the quarter.
But if the shareholding ratio is less than 5% after the reduction, there will no longer be a disclosure obligation."
Zhao Chen nodded and did not ask any further questions.
Lin Shicheng added on the other end of the phone:
"Mr. Zhao, there is one more thing I need to remind you. Although the rules allow quarterly disclosure, you need to internally record the time, quantity and price of each increase in holdings.
In case of future SEC inquiries, you need to be able to provide complete transaction records. I will help you organize and archive these data."
Zhang Qingxue answered next to him, "Lawyer Lin, I will record it every day and send you a copy after the market closes."
"Okay. Then I won't bother you. If you still have any questions tomorrow, please feel free to contact me at any time."
The phone hangs up.
"Do you hear me clearly?" he said, "Buy every day and control it within 9.9%. We will disclose it uniformly after the end of the quarter. There is no need for any announcement in the middle."
Zhang Qingxue nodded. "Understood. I record the transaction data every day and send it to Lawyer Lin for filing after the market closes."
Su Wantang asked, "Then if when we buy 9.5%, someone in the market follows suit and buys, pushing up the stock price, should we continue to buy?"
Zhao Chen thought for a while. "Keep buying. As long as it is below 300 US Dollar, it is cheap.
If the stock price rises above 280, slow down and buy less every day.
If it rises above 290, stop and wait for a correction. If Common Stock is below 300, it will not be a loss no matter what."
He glanced at the clock on the wall. The time New York was nine o'clock in the evening, and the time Shan City was ten o'clock in the morning.
Chen Xi should have arrived at the office.
He picked up his phone and sent a message to Chen Xi:
"Tesla Common Stock starts buying, you will speed up the acquisition of Bubble Mary Existing Shares."
Chen Xi replied with "received" in seconds, followed by an emoticon of Mololoy Thumbs-Up.
Zhao Chen looked at the emoticon, smiled, and put the phone on the coffee table.
"Aunt Zhang, Wantang, you worked hard today. Go to bed early. Continue tomorrow."
Zhang Qingxue closed the laptop, stood up, and moved his shoulders.
She walked to the door, suddenly stopped, turned around and looked at Zhao Chen, her expression became serious.
"Xiao Chen, there is one more thing."
Zhao Chen looked at her.
Zhang Qingxue said, "Visa. Our entry this time is a business visa, and the stay period is only two weeks."
Those who entered the country on February 23 must leave the country before March 9, otherwise they will be considered overstayed."
Zhao Chen frowned slightly. He almost forgot about it.
When I came here, I just wanted to get things done as soon as possible and didn't calculate the time carefully.
Now I want to increase my holdings of Tesla. There is a half-month window period and I will definitely not be able to buy it all before March 9th.
Su Wantang also stopped and stood at the door, waiting for Zhang Qingxue to continue.
Zhang Qingxue Since this question has been raised, there must be a solution.