SEC Form 4: Statement of Changes in Beneficial Ownership Overview

Demystifying SEC Form 4: Understanding Changes in Beneficial Ownership

Navigating the complexities of securities regulation often involves grappling with various forms and filings mandated by regulatory bodies. One such document, SEC Form 4: Statement of Changes in Beneficial Ownership, holds particular significance for insiders of publicly traded companies. This comprehensive guide delves into the intricacies of Form 4, shedding light on its purpose, requirements, related forms, filing procedures, and real-world applications.

Unraveling SEC Form 4: A Closer Look

Understanding Form 4:
SEC Form 4 serves as a vital mechanism for monitoring and disclosing material changes in the ownership of securities by company insiders. Mandated by federal securities laws, Form 4 must be promptly filed with the Securities and Exchange Commission (SEC) whenever insiders, including directors, officers, and significant shareholders, execute transactions involving the company's stock.

Key Highlights:

• Form 4 captures essential details such as the reporting person's relationship to the company, transaction particulars, and the nature of acquired or disposed securities.
• Timely disclosure of information on Form 4 is imperative, as failure to comply may result in civil or criminal repercussions.

Navigating Related SEC Forms

Form 3:
Initiated upon assuming a role as an officer, director, or beneficial owner, Form 3 entails the initial registration of securities holdings within ten days of appointment.

Form 5:
In cases where transactions remain unreported via Form 4, individuals have the option to file Form 5 within 45 days following the company's fiscal year-end to rectify reporting oversights.

Enhancing Transparency:
Beyond Form 4, various other filings such as Form 10-K, Form 10-Q, Form S-1, and Form 8-K play pivotal roles in promoting transparency and accountability within the corporate landscape.

Filing Procedures and Compliance

Electronic Submission:
Form 4 filings are predominantly conducted electronically through the SEC's Electronic Data Gathering Analysis and Retrieval System (EDGAR), ensuring efficient dissemination and accessibility of disclosed information.

Timeline for Filing:
Mandatory filings must be completed within two business days from the occurrence of the material transaction, underscoring the importance of timely compliance.

Real-World Illustration: Elon Musk's Form 4 Filing

Case Study:
A tangible example of Form 4's application emerges through Elon Musk's February 2020 filing, wherein the Tesla CEO disclosed the acquisition of 13,037 shares of common stock, offering insights into transactional details and resulting ownership changes.

Analyzing Form 4 Data:
The breakdown of Mr. Musk's filing elucidates essential sections, including transaction dates, security types, share quantities, and corresponding prices, providing a snapshot of beneficial ownership alterations.