DEFINITION of 'Form 5'

Form 5 is a document that company insiders must file with the Securities and Exchange Commission (SEC) if they have conducted transactions during the year that they did not previously report via a Form 4. (Insiders file Form 4 when a material change occurs in their holdings.)

An insider is defined as a company director or senior officer, as well as any person or entity that beneficially owns more than 10% of a company's voting shares.


SEC Form 5 requires the following:

  • The name and physical address of the reporting person
  • The issuer name and stock ticker
  • A statement for the issuer's fiscal year ended (month/day/year)
  • If Form 5 is an amendment, the date that the original form was filed (Month/Day/Year)
  • The relationship of the reporting person(s) to the issuer (e.g., director, 10% owner, officer, or other)
  • If this is individual or joint/group reporting
  • A list of the securities, transaction dates, deemed execution dates, transaction codes, amount of securities owned at the end of the issuer’s fiscal year, a note of direct or indirect ownership, and the nature of indirect beneficial ownership

Form 5 submissions are due to the SEC no later than 45 days after the company's fiscal year ends, or within six months after an insider ends his or her affiliation with the company. Form 5 is also related to SEC Form 3, which tracks all company insiders. Each company insider must file Form 3 no later than 10 days after she or he becomes affiliated with a company.

Form 5 and Insider Trading

Form 5 helps to prevent illegal insider trading through disclosure. (Insider trading is the buying or selling of a security by someone who has access to material nonpublic information about the security.) If the insider makes the trade when the material information has not been announced, the trade is illegal.

For example, in July 2018, a Boston federal jury found Schultz Chan and Songjiang Wang, who worked at Akebia Therapeutics and Merrimack Pharmaceuticals Inc., respectively, guilty of insider trading. Both Chan and Wang denied the charges; however, prosecutors said that from 2013 to 2014, Wang delivered proprietary information about Merrimack’s positive drug studies to Chan, prior to the Cambridge, Massachusetts-based company’s public announcement of the results. With the knowledge, Chan and his wife made several purchases of Merrimack stock. In one instance the couple made $136,000.

While filing Form 5 cannot fully avoid illegal insider trading, it is one step towards making individuals and organizations more accountable.

  1. Form 3

    Form 3 is a document that a company insider or major shareholder ...
  2. Insider Trading Act of 1988

    The Insider Trading Act of 1988 increased the liability penalties ...
  3. SEC Form T-4

    SEC Form T-4 is an application for exemption from certain sections ...
  4. Insider Information

    Insider information is a non-public fact regarding the plans ...
  5. Tip From A Dip

    A tip from a dip is advice from a person who claims to have inside ...
  6. Section 16

    Section 16 is a section of the Securities Exchange Act of 1934 ...
Related Articles
  1. Trading

    What Investors Can Learn From Insider Trading

    Some insider trading is actually legal - and can be extremely telling for investors.
  2. Trading

    Can Insiders Help You Make Better Trades?

    Find out why the trading activity of owners and executives can be a valuable trade-confirmation tool.
  3. Investing

    How Insider Trading Is Prevented in Corporations

    Insider trading can undermine the markets and damage reputations, so companies and regulators alike have instituted policies and actions to prevent it.
  4. Insights

    Insider Selling Isn't Always A Bad Sign

    Are you using insider trading as a signal for your own buying or selling strategy? You may need to reconsider the approach since rule 10b5-1 prohibit trading based on inside information.
  5. Investing

    SEC Filings: Forms You Need To Know

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

    The Viability Of Tracking Insiders

    Insider trading use to be profitable, but can it be today? Learn if investors should be paying attention to insiders.
  7. Financial Advisor

    Company Insiders Aren’t Buying Stock: Should You?

    Purchases of company stock by insiders is on the decline. Is this a warning sign?
  8. Taxes

    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.
  9. Insights

    6 Tax Forms for Investors Who Have Money Abroad

    If you're a U.S. citizen or resident, and you own assets in other countries, you might need to file these six forms with the government.
  1. What exactly is insider trading?

    Two common misconceptions are that all insider trading is illegal and that insider trading and insider information are the ... Read Answer >>
  2. How are open-market different from closed-market transactions?

    Legal insider transactions can take place in two ways: an open-market transaction or a closed-market transaction. Learn the ... Read Answer >>
Trading Center