The economic crisis prompted a renewed focus on those market participants that use equity total return swaps to obtain synthetic positions in the shares of public companies. Periodically, parties that enter into equity total return swaps have faced calls to disclose the positions they "hold" as if they physically owned the relevant shares. The appeals court decision in CSX Corp. v. Children's Investment Fund Management (UK) LLP explored the issue of whether the long party to a cash-settled equity total return swap is subject to the disclosure requirements of Sections 13(d) and (g) of the Exchange Act by reason of "beneficial ownership." However, the decision stopped short of providing substantive guidance on this issue to the derivatives market.
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