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Determining Ownership Interest in a Security

If you want to know if a person or an entity has significant ownership interest in a registered, non-exempt equity security of any class, there are 3 forms you should check. They are Form 3, Form 4 and Form 5.

Forms 3, 4 and 5: Who Are Required to File?

Forms 3, 4 and 5 are filings required from a security's corporate insiders and beneficial owners. According to Section 16 of the Securities Exchange Act 1934, Forms 3, 4 and 5 are required from:

  • the officers and directors of the company issuing the security (i.e. corporate insiders)
  • the principal stockholders of the security; specifically, those who directly or indirectly own over 10% of any class of an equity security (i.e. beneficial owners)

Form 3

Corporate owners and beneficial owners file Form 3 at the time of the security's registration (no later than the effective date of the security's registration statement). This is particularly applicable if a company is registering equity securities for the first time.

Corporate insiders and beneficial owners of an already-registered equity security also file Form 3. They must do so within 10 days of becoming a director or an officer of the security issuer or within 10 days of becoming a principal stockholder.

Form 4

Form 4 is a statement of changes in beneficial ownership. This form must be filed within 2 business days of the execution of the change/transaction.

Form 5

Form 5 is used for reporting annual changes in beneficial ownership of securities. In Form 5, corporate insiders/beneficial owners report changes which they were not able to repot using Form 4 or changes in beneficial ownership that were exempt from the 2-day reporting rule. Form 5 is filed at the end of the company's fiscal year (no later than 45 days after the fiscal year has ended).

Where to Obtain Insider Forms:

  • The Securities and Exchange Commission's Electronic Data Gathering, Analysis, and Retrieval system (EDGAR). You can use this database for most recent SEC filings that were submitted electronically.
  • The SEC Office of Investor Education and Advocacy. Write to this office to request a copy of any SEC filing that is not available through EDGAR (i.e. those forms which were not submitted electronically).
  • The Security Exchange where the security is registered. Beneficial owners and corporate insiders of securities that are registered on a national securities exchange are also required to file these forms with the exchange.
  • NASDAQ's website. NASDAQ offers a searchable database of Insider Form 4. Just write down the ticker symbol (up to 25 symbols; you can also use the symbol lookup to add symbols) then click "Go Now" to initiate your Form 4 search.
  • Other websites. There are other websites that offer downloadable copies of insider forms. Just do a Google search (or a Yahoo! Search, for that matter), using "insider reports" as your keyword to find these websites.
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