What is 'Form T'

Form T is an electronic form that FINRA requires brokers to use for reporting equity trades executed outside of normal market hours. Form T trades occur during extended hours — before the market opens and after it closes. The objective of the Form T report is to maintain market transparency and integrity.

Breaking Down 'Form T'

Trading in extended hours enables investors to react quickly to events that typically occur outside regular market hours, such as earnings reports. However, liquidity may be constrained during such Form T trading, resulting in wide bid-ask spreads. Form T trading is especially suited for overseas investors, since they may conduct the bulk of their U.S. trading when their markets are open but U.S. markets are closed. The growing popularity of electronic communication networks means that Form T trading and filings are bound to continue increasing.

Form T Guidelines

In July 2011, FINRA announced a new Form T submission process, which is still in effect:

"FINRA reminds firms of their obligation to submit to FINRA on the Form T Equity Trade Reporting Form, as soon as practicable, last sale reports of over-the-counter (OTC) transactions in equity securities for which electronic submission is not possible. In addition, FINRA is announcing a new process for the electronic submission of the Form T. Firms are required to submit the Form T in accordance with this new process no later than July 5, 2011."

The new filing portal is FINRA's Firm Gateway. Finra explained: "Through the Firm Gateway, in addition to creating and submitting Form T filings electronically, firms will be able to view, edit and delete draft filings, as well as view previously submitted filings. Firms will be required to continue providing trade details on an Excel spreadsheet as part of the Form T submission. Previously, Form T submissions were done by email, and before email, via paper (email submissions were still called 'Paper Form T')."

Form T Filings: Some Lessons

In the OTC market, Form T trades are mostly the result of accumulated buys or sells handled on a not held basis by block desks, otherwise known as 'late prints.' They have nothing to do with short-selling. Large blocks of shares may not all be sold in a single day, so a broker or market maker would file a Form T for the remainder of shares listed at the average price that day's shares sold for as if they all had sold. If all the shares had sold in that one session, the transaction would have been recorded normally.

And investor sometimes can tell if a Form T transaction is by a buyer or seller by looking at the price the trades were entered at. If entered at the lower end of the day's range and the shares were under pressure, it's likely a seller. If entered at the high end of the range, and shares were surging, it's likely from a buyer.

RELATED TERMS
  1. Form 211

    Form 211 is a type of form that is required by the Financial ...
  2. T Distribution

    A T distribution is a type of probability function that is appropriate ...
  3. SEC Form 15

    SEC Form 15 is a voluntary filing with the regulator by publicly ...
  4. Form 3

    Form 3 is a document that a company insider or major shareholder ...
  5. Form 8949

    Form 8949 is an Internal Revenue Service (IRS) form used by individuals, ...
  6. Individual Tax Return

    An individual tax return is a tax form filed with a tax agency ...
Related Articles
  1. Retirement

    Top 3 T. Rowe Funds for Retirement Diversification in 2016

    Find out which T. Rowe Price funds to use to create a diversified retirement income portfolio for current income, income growth and capital preservation.
  2. Investing

    3 T. Rowe Price Funds for Value Investing

    Read analyses of the top three T. Rowe Price value funds open to new investors, and learn about their investment objectives and historical performances.
  3. Financial Advisor

    4 Best T. Rowe Price Mutual Funds

    Learn about four of the best T. Rowe Price mutual funds that have shown strong performance with reasonable net expense ratios, outperforming most peers.
  4. Financial Advisor

    The Investment Strategy Behind T. Rowe Price Capital Fund

    Learn about the T. Rowe Price Capital Appreciation Fund and its investment strategy, portfolio composition, management, investment performance and terms.
  5. Investing

    5 T. Rowe Price Mutual Funds with Long Track Records (TROW)

    Learn about T. Rowe Price and the company's nearly 80-year history, and discover which mutual funds in the company's lineup have been around the longest.
  6. Investing

    Fund Highlight: T. Rowe Price New Horizons Fund (PRNHX)

    Learn about the T. Rowe Price New Horizons Fund, which specializes in investing in small market capitalization companies with strong growth prospects.
  7. Investing

    4 Top T. Rowe Price Funds for Growth Investors

    Discover the four best mutual funds administered and managed by T. Rowe Price that specialize in investing in stocks of growth companies.
  8. Investing

    T Rowe Price Capital Appreciation Fund Performance Case Study (PRWCX)

    Check out an overview of T. Rowe Price Capital Appreciation Fund as well as its financial performance and historical trends over the past five years.
  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.
  10. Taxes

    Late with Your Taxes? Grab IRS Form 4868

    Fill out this form to get a few more months to file your tax return. But remember, April 15 (17, in 2018) is still the payment due date if you owe taxes.
RELATED FAQS
  1. Why do you need a margin account to short sell stocks?

    The reason that margin accounts and only margin accounts can be used to short sell stocks has to do with Regulation T, a ... Read Answer >>
Trading Center