Corporate insiders – meaning a company's officers and directors, and any beneficial owners of more than ten
percent of a class of the company's equity securities registered under Section 12 of the Securities Exchange Act of
1934 – must file with the SEC a statement of ownership regarding those securities. On August 27, 2002, the SEC
adopted rules and amendments to Section 16 of the Exchange Act, implementing the provisions of the Sarbanes-Oxley
Act of 2002 that accelerated the deadline for filing most insider ownership reports.
The initial filing is on Form 3. An insider of an issuer that is registering equity securities
for the first time under Section 12 of the Exchange Act must file this Form no later than the effective date of the
registration statement. If the issuer is already registered under Section 12, the insider must file a Form 3
within ten days of becoming an officer, director, or beneficial owner.
Changes in ownership are reported on Form 4 and must be reported to the SEC within two business
days. You can find the limited categories of transactions not subject to the two-day reporting requirement
in the new rule.
Insiders must file a Form 5 to report any transactions that should have been reported earlier on a Form
4 or were eligible for deferred reporting.If a Form must be filed, it is due 45 days after the end of
the company's fiscal year.
Since June 30, 2003, the SEC has required insiders to submit forms electronically through the SEC's EDGAR
system. (Prior to that date, insiders could choose, but were not required, to file electronically). The SEC also
requires companies that maintain websites to now post the forms by the end of the next business day after filing
them with the SEC.
If you are searching for the forms that were not previously filed on EDGAR, you can request a copy of the
document from the SEC's Office of Investor Education and Advocacy.
You also may be able to find Form 4 on the Nasdaq's website. Simply enter the ticker symbol for the company in
the "Quotes" box and click "GO". In the pull-down box on the next screen, replace "FlashQuotes" with "Insider Form
4". There also are many commercial websites that offer this information. If you enter the words "insider reports"
into most Internet search engines, you'll quickly find websites that can provide this information.
For more information on the reporting requirements for officers, directors, and beneficial owners, you can read
Section 16 of the Exchange Act. You can download blank PDF versions of Form 3, Form 4, and Form 5 as well as the
instructions to these Forms.
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Jeroen Snoeks is the founder of UndervaluedEquity.com, a website for
investors passionate about investing in undervalued stocks. ThroughUndervaluedEquity.com, he shares his
experience and knowledge and will soon reveal his personal stock portfolio.