Section 16 FAQ
Quick answers to help you understand Forms 3, 4, and 5.
What is Section 16?
Section 16 of the Securities Exchange Act of 1934 requires directors, officers, and certain shareholders of a public company to report their holdings and transactions in company securities. These reports are made through SEC Forms 3, 4, and 5.
Who must file Forms 3, 4, or 5?
You are subject to Section 16 reporting if you are:
A director of a public company
An officer of a public company (as defined by SEC rules)
A beneficial owner of more than 10% of any class of the company’s registered equity securities
These individuals are known as "reporting insiders" and must report ownership and changes in ownership to the SEC.
What is the purpose of Form 3?
Form 3 is the initial report of beneficial ownership. It must be filed when a person becomes a reporting insider under Section 16 (e.g., upon becoming a director, officer, or 10% owner).
Deadline: Within 10 calendar days of becoming subject to Section 16.
When is Form 4 required?
Form 4 is used to report most changes in ownership, such as stock purchases, sales, grants, or option exercises.
Deadline: Within 2 business days of the transaction date.
What is Form 5 and when is it due?
Form 5 is an annual catch-all form used for:
Transactions that were exempt from Form 4 reporting, and
Transactions eligible for deferred reporting
Deadline: 45 days after the company’s fiscal year-end (typically February 14 for calendar-year companies).
Do I need to file amendments if a mistake is made?
Yes. If you discover an error or omission in a previously filed Form 3, 4, or 5, you are required to file an amended version to correct it. The amendment should clearly identify the changes and refer back to the original filing.
What happens if I file late or not at all?
Late filings are publicly disclosed in the company’s annual proxy statement, which can lead to reputational harm and increased regulatory scrutiny. The SEC may also take enforcement action for repeated or willful failures to comply.
Does ACN help with these filings?
Yes. ACN provides fast and simple filing support for Forms 3, 4, and 5. You complete our template, we format the filing for EDGAR, and you approve it before we submit it on your behalf. You’ll need EDGAR credentials, but we handle the rest.
Disclaimer:
The information provided in this FAQ is for general informational purposes only and does not constitute legal, compliance, or financial advice. ACN Solutions LLC is not a law firm, compliance advisor, or affiliated with the Securities and Exchange Commission (SEC). While we strive to provide accurate and timely guidance based on publicly available SEC resources, we do not speak on behalf of the SEC and are not authorized to interpret its rules or policies. Readers should consult their legal counsel or compliance professionals for specific guidance related to their regulatory obligations.