Definition
The term Form 3 refers to a report filed with the Securities and Exchange Commission when an individual first becomes a company insider. Reporting entities have ten days after the event to file this report with the Securities and Exchange Commission.
Explanation
Under Section 12 of the Securities Exchange Act of 1934, individuals are required to file a Form 3 ten days after becoming a company insider, regardless of their equity position. Generally, company insiders include directors, officers of the company, and owners of more than ten percent of the company's registered equity securities.
Form 3, also known as the Initial Statement of Beneficial Ownership of Securities, is a two page document that is divided into two sections. The first deals with non-derivative securities owned by the insider. This section of the report captures information such as:
Name and Address of Reporting Person
Relationship to Issuer (Director, Officer, 10% Owner)
Title of Security
Amount of Securities Beneficially Owned
Ownership Form (Direct or Indirect)
Nature of any Indirect Ownership (Self, Spouse, Trustee, Corporation)
The second section deals with derivative securities that are beneficially owned. This would include puts, calls, warrants, options, as well as convertible securities. This section of the report captures information such as:
Title of Derivative
Exercise Dates
Derivative Securities (Quantity and Conversion or Exercise Price)
Transaction Dates
Derivative Securities Acquired or Disposed of (Quantity and Price)
Ownership Form (Direct or Indirect)
Nature of any Indirect Ownership (Self, Spouse, Trustee, Corporation)
Related Terms
The term Form 10-K refers to an annual report that summarizes the business and financial performance of a company. Form 10-K is a detailed document, which is produced by companies at the close of their fiscal year. The document contains a large number of audited financial statements that publically-traded companies are required to file with the Securities and Exchange Commission each year.
Moneyzine EditorNovember 6th, 2024
The term Form 10-Q refers to a quarterly report that summarizes the business and financial performance of a company. Form 10-Q is a detailed document, which is produced three times each year and contains a number of unaudited financial statements publicly-traded companies are required to file with the Securities and Exchange Commission.Moneyzine EditorNovember 6th, 2024
The term annual report refers to a document that summarizes the operating and financial performance of a company over the course of a year. An annual report is typically distributed to shareholders along with a definitive proxy statement approximately forty days prior to the company's annual stockholder meeting.Moneyzine EditorNovember 6th, 2024
The term proxy statement refers to a document companies provide to their shareholders outlining decisions the company will discuss at a special or annual shareholder meeting. The Securities and Exchange Commission requires companies to provide a definitive proxy statement to shareholders prior to a vote on important matters.Moneyzine EditorNovember 6th, 2024
The term Form 8-K refers to a report that summarizes material events that may be of importance to the Securities and Exchange Commission or investors. The Form 8-K is used to describe a number of material events as they occur. Regulations require companies to file this report with the Securities and Exchange Commission within four days of the event.Moneyzine EditorNovember 6th, 2024
The term Form 4 refers to a report filed with the Securities and Exchange Commission whenever the holdings of company insiders change. Reporting entities have four days after the event to file these reports with the Securities and Exchange Commission.Moneyzine EditorNovember 6th, 2024
The term Form 5 refers to a report filed with the Securities and Exchange Commission on an annual basis, summarizing the trading activities of company insiders. Reporting entities have forty-five days after the company's fiscal year is over to file these reports with the Securities and Exchange Commission.Moneyzine EditorNovember 6th, 2024
The term Form 1099-B refers to an Internal Revenue Service document issued by a broker or barter exchange that summarizes the proceeds from the liquidation, redemption, or sale of stock. The information reported on IRS Form 1099-B (Proceeds from Broker and Barter Exchange Transactions) is subsequently used by taxpayers to complete Schedule D of Form 1040.Moneyzine EditorNovember 6th, 2024
