What Is SEC Form 5 – SEC Reporting Requirements- Securities Lawyer 101
After a company becomes subject to SEC reporting requirements by registering a class of equity securities under Section 12(b) or 12(g) of the Securities Exchange Act of 1934, as amended (the “Exchange Act”), insiders are required to submit certain reports and filings with the SEC. Section 16 is not applicable to companies that have reporting obligations under Section 15(d) because of filing a Form S-1 or other registration statement under the Securities Act of 1933, as amended (the “Securities Act”).
Under Section 16(a) requires certain insiders to report his or her initial ownership of the company’s equity securities on Form 3 after an initial triggering event. Section 16 insiders must report any changes to the amount of securities subsequently owned on Form 4. Section 16 insiders must also file an Annual Statement of Changes in Beneficial Ownership on Form 5 if there are any transactions in the company’s equity securities that the Section 16 insider engaged in during the company’s most recently completed fiscal year that were not previously reported on a Form 4, other than transactions that are exempt from Form 5’s SEC reporting requirements.
Who is Subject to Section 16(a)?
- Officers, and
- Stockholders who hold directly or indirectly beneficially more than 10% of the issuer’s equity securities registered under Section 12(b) or 12(g) of the Exchange Act.
Section 16 is only applicable to companies that have registered a class of equity securities under Section 12(b) or Section 12(g). Directors, officers and greater than 10% stockholders of companies that file periodic reports only under Section 15(d) of the Exchange Act or that registered only debt securities under Section 12 are not subject to Section 16 reporting obligations.
What Transactions Are Required to be Reported In Form 5? SEC Reporting Requirements
- Transactions in securities during the issuer’s previous fiscal year that were not required to be reported on a Form 4
- Transaction that were not previously reported but were required to be reported on a Form 3 or Form 4,
- The filer’s beneficial ownership at the end of the fiscal year
Transactions Reported on Form 5
- Small acquisitions of an issuer’s equity securities in one or more transactions in a total amount that is less than $10,000
- Any transaction required to be reported on a Form 4 during the most recent fiscal year but was not
- Transactions exempt from Section 16(b), except for the following, which either must be reported earlier on a Form 4 or do not need to be reported at all:
- exercises of stock options, warrants or other derivative securities issued by the issuer to the insider exempt under Rule 16b-3, which must be reported on Form 4;
- conversion or exercises of other derivatives by the insider exempt under Rule 16b-4, which must be reported on Form 4;
- investments in tax-qualified plans exempt under Rule 16b-3(c), which do not need to be reported under Section 16(a);
- other acquisitions or dispositions between the filer and the issuer exempt under Rule 16b-3(d) or 16b-3(e), which must be reported on Form 4;
- discretionary transactions in an issuer’s employee benefit plans exempt under Rule 16b-3(f), which must be reported on Form 4; and
- other transactions specifically exempted by the rules from reporting under Section 16(a) which do not need to be reported .
An insider is not required to submit a Form 5 to the SEC if he did not have any transactions to report during the entire year or if he reported every transaction that occurred during the year on Form 4 including transactions that are otherwise exempt from reporting on Form 4, if any.
What Information Is Included in a Form 5?
SEC Form 5 requires the following information:
- Name of the Issuer and its ticker symbol
- Last day of the issuer’s fiscal year
- Relationship to the issuer such as director, officer and title or stockholder
- Whether the Form 5 includes information that should have been reported earlier on a Form 3 or Form 4
- Name and address of the Reporting Person
- Amounts of securities beneficially owned by the Reporting person at the end of the company’s fiscal year in tabular format:
- Table I for non-derivative securities (type of non-derivative security, date of transaction, amount of securities purchased or sold, price, transaction code and amount owned at the end of the issuer’s fiscal year, whether the securities are directly or indirectly owned)
- Table II for derivative securities (type of derivative security, conversion price, date of transaction, amount purchased or sold, transaction code, date security is exercisable and its expiration date, type and amount of security for which derivative was exercised, exchanged or converted, price and amount owned at the end of the fiscal year, whether the securities are directly or indirectly owned)
When Is Form 5 Required to be Submitted to the SEC?
Insiders must submit the Form 5 to the SEC within 45 days after the company’s year-end. SEC Form 5 must be filed electronically through the SEC’s EDGAR system.
Section 16 reporting is the responsibility of each individual reporting person. Companies are required to report in their Proxy Statements and Annual Report on Form 10-K any known failure by a Section 16 insider to file a Form 5 report on a timely basis during the most recent fiscal year by any person who was a director, officer, 10% stockholder or other person subject to Section 16. Under SEC rules, a “known failure to file” includes the failure of any of these persons to file a Form 5, unless the company knows that no Form 5 is required or the person provides the company with a written representation that no Form 5 is required. The company must maintain any such written representation for two years, and provide a copy to the SEC upon request.
Public companies should keep in mind that the SEC has brought enforcement actions against officers, directors and beneficial holders of SEC reporting issuers for violating Section 16’s reporting requirements.
For further information about this securities law blog post, please contact Brenda Hamilton, Securities Attorney at 101 Plaza Real S, Suite 202 N, Boca Raton, Florida, (561) 416-8956 or visit www.securitieslawyer101.com. This securities law blog post is provided as a general informational service to clients and friends of Hamilton & Associates Law Group and should not be construed as, and does not constitute legal advice on any specific matter, nor does this message create an attorney-client relationship. Please note that the prior results discussed herein do not guarantee similar outcomes.
Hamilton & Associates | Securities Lawyers
Brenda Hamilton, Securities Attorney
101 Plaza Real South, Suite 202 North
Boca Raton, Florida 33432
Telephone: (561) 416-8956
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