NEW YORK CITY, New York: The U.S. Securities and Exchange Commission has issued new guidance requiring activist investors to disclose the identities of certain clients in regulatory filings, a move that could reshape shareholder activism and reduce the secrecy long prized by hedge funds.

The updated guidance, issued through the SEC's Corporate Finance Interpretations, clarifies how the regulator expects investors to complete Schedule 13D filings and proxy statements following a busy period of activist campaigns.

According to lawyers who advise activist investors, the changes were unexpected and had not been widely reported. The SEC did not respond to requests for comment or explain why it issued the guidance now.

The new interpretation signals a greater emphasis on transparency, particularly as activist hedge funds increasingly use special-purpose investment vehicles, known as "sidecars," to finance campaigns.

"The identities of the investors in an entity formed for the purpose of acquiring securities of a specific issuer and engaging in an activism campaign at that issuer must be disclosed," the SEC said in its response to Question 110.09.

In another interpretation, the regulator said clients investing more than US$500 in a limited partnership formed to solicit votes in a board contest are considered "participants" and must also be disclosed.

The guidance comes amid a strong year for shareholder activism. During the first half of 2026, investors including Elliott Investment Management, Ancora Alternatives and TOMS Capital Investment Management launched campaigns targeting companies such as Warner Bros. Discovery and Devon Energy.

Hedge funds have traditionally argued that keeping the identities of their investors confidential helps protect proprietary investment strategies and prevents competitors from copying their trades.

The growing use of sidecar investment vehicles allows clients to back campaigns at specific companies rather than investing in a fund's broader portfolio.

Companies targeted by activist investors, however, have argued that greater transparency is necessary to understand who is backing efforts to influence corporate decisions.

The SEC's latest interpretation echoes a high-profile dispute involving medical device maker Masimo, which in 2022 adopted bylaws requiring activist investors seeking board seats to disclose their limited partners and future campaign plans.

The rules sparked strong opposition from activist investors, and although few companies adopted similar measures, attorneys said many corporations sought legal advice on whether to follow Masimo's approach.

Masimo reversed the policy in early 2023, ending the disclosure requirement. The company was acquired by Danaher earlier this year.