What Is SEC Form 4: Statement of Changes in Beneficial Ownership?

SEC Form 4: Statement of Changes in Beneficial Ownership is a document that must be filed with the Securities and Exchange Commission (SEC) whenever there is a material change in the holdings of company insiders. Insiders consist of directors and officers of the company, as well as any shareholders, owning 10% or more of the company's outstanding stock. The forms ask about the reporting person's relationship to the company and about purchases and sales of such equity securities.

The filing of Form 4 relates to Sections 16(a) and 23(a) of the Securities Exchange Act of 1934, as well as Sections 30(h) and 38 of the Investment Company Act of 1940. Disclosure of information required on Form 4 is mandatory and becomes public record upon filing.

Key Takeaways

  • Form 4 must be filed with the Securities and Exchange Commission whenever there is a material change in the holdings of company insiders.
  • If a party fails to disclose required information on a Form 4, civil or criminal actions could result.
  • It must be filed within two business days starting from the end of the day the material transaction occurred.

Who Can File SEC Form 4: Statement of Changes in Beneficial Ownership?

This two-page document covers any buy-and-sell orders on the open market, as well as the exercise of company stock options. Form 4 is required to be filed by a company when there is a change in the holdings of company insiders. This filing is related to Form 3 and Form 5, which also cover changes to the company insider holdings. The SEC is able to use the information in the referral of a case to other governmental authorities and self-regulatory organizations (SROs). If a party fails to disclose the required information on Form 4, civil or criminal actions could result.

The SEC has the capacity to use information disclosed on Form 4 in investigations or litigation involving federal securities laws, in addition to other civil, criminal, or regulatory statutes or provisions.

How to File SEC Form 4: Statement of Changes in Beneficial Ownership

In general, a party must file Form 4 electronically via the Commission’s Electronic Data Gathering Analysis and Retrieval System (EDGAR). Exceptions can occur during hardship. It is mandatory within two business days starting from the end of the day the material transaction occurred.

Practical Example of SEC Form 4

In December 2017, the Chief Administrative and Internal Operations Officer of the public company TiVo (ticker: TIVO) filed Form 4 as an individual. The form disclosed the physical address of TiVo in San Jose, CA, the date of transaction of common stock, transaction code, amount and price of securities transacted, and amount of securities beneficially owned following the transaction.

Forms Related to SEC Form 4

Several other forms are critical to maintaining transparency and recording the actions of public company executives, officers, and directors. These include the annual report 10-K, the quarterly 10-Q, S-1, and S-1A forms upon going public, the 8-K for unscheduled material events or corporate changes, and others.

Download SEC Form 4: Statement of Changes in Beneficial Ownership

Here is a link to a downloadable SEC Form 4: Statement of Changes in Beneficial Ownership.