Section 16

What is hte 'Section 16'

The Section 16 is a section of the Securities Exchange Act of 1934 that is used to describe the various regulatory filing responsibilities that must be met by directors, officers and principal stockholders. According to Section 16, every person who is directly or indirectly the beneficial owner of more than 10% of the company, or who is a director or an officer of the issuer of such a security, shall file the statements required by this subsection with the Securities and Exchange Commission (SEC).

BREAKING DOWN 'Section 16'

Insiders affiliated with a public company, or any owners of more than 10%, are required to electronically file Form 3 with the SEC no later than 10 days after the individual becomes affiliated with the company. If there is a material change in the holdings of the company's insiders, they are required to file Form 4 with the SEC. Also, pursuant to Section 16, Form 5 must be filed by an insider who has conducted an insider transaction during the year if it was not previously reported on Form 4.

RELATED TERMS
  1. Form 3

    A document that must be filed with the Securities and Exchange ...
  2. Form 4

    A document that must be filed with the Securities and Exchange ...
  3. SEC Form N-6F

    A filing with the Securities and Exchange Commission (SEC) that ...
  4. SEC Form N-CSR

    A form completed by registered management investment companies ...
  5. SEC Form 8-K12G3

    A form that is an initial filing for the notification of securities ...
  6. SEC Form 1

    An application for and amendments to an application for registration ...
Related Articles
  1. Investing Basics

    SEC Filings: Forms You Need To Know

    The forms companies are required to file provide a clear view of their histories and progress.
  2. Professionals

    Registration of Securities

    FINRA/NASAA Series 66 - Registration of Securities. In this section exemptions to state registration of securities under the Uniform Securities Act (USA) and notice filing.
  3. Investing Basics

    How A Company Files With The SEC

    Filing with the SEC is not as complicated as you might thing -- just be meticulous about following the steps.
  4. Markets

    Speed Read SEC Filings For Hot Stock Picks

    SEC forms can be a real headache. Find out how to make your research more efficient - and more effective.
  5. Popular Resources for Equity Research and Analysis: Chapter 2: The SEC Website

    Second to the company investor relations sites is the direct SEC website at www.sec.gov. Investors can learn quite a bit about the securities industry from the SEC. The forms page, which details ...
  6. Professionals

    Introduction

    The forms companies are required to file provide a clear view of their histories and progress.
  7. Professionals

    Securities Registration

    Series 6, Section 8: Securities Registration. This page deals with Sections 5, 12, 17 and 23 under the Securities Act of 1933
  8. Professionals

    STOCKHOLDERS OWNING 5% OF AN ISSUER’S EQUITY SECURITIES

    Stockholders Owning 5% of An Issuer’s Equity Securities The Securities Exchange Act requires that individuals or entities who acquire 5% or more of an issuer’s equity securities to ...
  9. Options & Futures

    Keeping An Eye On The Activities Of Insiders And Institutions

    These transactions reveal much about a stock. We go over what to consider and where to find it.
  10. Investing Basics

    Explaining Insider Trading

    While often associated with illegal activity, insider trading actually encompasses both illegal and legal trading of securities.
RELATED FAQS
  1. How is trading volume regulated by the Securities and Exchange Commission (SEC)?

    Learn about how the SEC uses the trading volume formula as one requirement for an exemption to the ban on the resale of restricted ... Read Answer >>
  2. What exactly is insider trading?

    An "insider" is any person who possesses at least one of the following: 1) access to valuable non-public information about ... Read Answer >>
  3. Where can I find a company's annual report and its SEC filings?

    Thanks to the Internet, finding financial reports is easier than ever. Nowadays, every reputable company has an investor ... Read Answer >>
  4. When must a company announce earnings?

    The Securities & Exchange Commission (SEC) requires companies to file earnings reports no later than 45 days after the ... Read Answer >>
  5. What are unregistered securities or stocks?

    Before securities, like stocks, bonds and notes, can be offered for sale to the public, they first must be registered with ... Read Answer >>
  6. How often should I measure my company's key performance metrics (KPIs)?

    Learn the definition of illegal insider trading while reviewing the people who can be involved and the regulations and consequences ... Read Answer >>
Hot Definitions
  1. Cost Of Debt

    The effective rate that a company pays on its current debt. This can be measured in either before- or after-tax returns; ...
  2. Yield Curve

    A line that plots the interest rates, at a set point in time, of bonds having equal credit quality, but differing maturity ...
  3. Stop-Limit Order

    An order placed with a broker that combines the features of stop order with those of a limit order. A stop-limit order will ...
  4. Keynesian Economics

    An economic theory of total spending in the economy and its effects on output and inflation. Keynesian economics was developed ...
  5. Society for Worldwide Interbank Financial Telecommunications ...

    A member-owned cooperative that provides safe and secure financial transactions for its members. Established in 1973, the ...
  6. Generally Accepted Accounting Principles - GAAP

    The common set of accounting principles, standards and procedures that companies use to compile their financial statements. ...
Trading Center