FTC, DOJ Looking at Hart-Scott-Rodino Rules Changes

The FTC and DOJ Antitrust Division are looking at possible changes to Hart-Scott-Rodino (HSR) Act implementation, FTC said Monday, announcing an NPRM and Advance NPRM to be published in the Federal Register. It said the NPRM suggests proposed transaction filers disclose more information about their associates and exempting the acquisition of 10% or less of an issuer's voting securities. The ANPRM seeks information on such topics as the size of the transaction and routes for avoiding the HSR Act requirements. The FTC said the vote to publish the ANPRM was 5-0. The NPRM vote was 3-2, with Commissioners Rohit Chopra and Rebecca Kelly Slaughter dissenting. Chopra said the exemptions provisions are concerning because the FTC "will completely lose visibility into a large set of transactions involving non-controlling stakes." Slaughter said the expanded de minimis exemption is a "broadening of the black box of unseen transactions," and the proposed changes could have unforeseen effects on corporate governance. DOJ antitrust chief Makan Delrahim said he backs creating an exemption for certain de minimis investments of 10% or less "to address the regulatory burdens of an overbroad HSR requirement for certain minority investments that do not raise competition concerns.” DOJ said the agency was particularly interested in feedback on the NPRM on removing the director/officer and vendor/vendee carve-outs.