Reporting Requirements for Public Company Insiders

Officers, directors, and beneficial owners of more than 10 percent of the shares of a public company must report their ownership of shares of the company to the Securities and Exchange Commission. Company officers and directors are considered corporate insiders. Beneficial holders of more than 10% of a class of a company’s equity securities registered under Section 12 of the Securities Exchange Act also are considered corporate insiders. Such insiders are required to report their holdings to the Commission when they first acquire company stock and when changes in their ownership occur.

Securities and Exchange Commission Form 3 must be filed with the Commission by an insider of any company that is registering its equity securities for the first time under Section 12 of the Securities Exchange Act. The form must be filed on or before the effective date of the registration statement. For public companies with securities already registered under Section 12, Form 3 also must be filed by persons who then become officers, directors, or beneficial owners of more than 10% of the registrant’s security. In such instances, Form 3 must be filed within 10 days after becoming an officer, director, or beneficial owner.

Commission Form 4 must be filed to report any changes in ownership. Form 4 must be filed with the Commission within two business days after the change in ownership occurs. Several types of transactions are not subject to the two-business day reporting deadline.

Commission Form 5 must be filed by insiders to report transactions that should have been reported earlier on a Form 4 or to report transactions that may be reported on a deferred basis rather than on Form 4. A Form 5, if it must be filed, is due within 45 days after the end of the issuing company’s fiscal year.

Forms 3, 4, and 5 must be reported electronically to the Commission through the Commission’s EDGAR system which is available to the public on the Internet. Also, public companies that maintain websites must post copies of Forms 3, 4, or 5 on their websites by the end of the business day following the day that the form was filed with the Commission.

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