What is SEC Form 15
SEC Form 15 is a voluntary filing with the Securities and Exchange Commission (SEC), also known as the Certification and Notice of Termination of Registration. It is used by publicly traded companies to revoke the registration of their securities. SEC Form 15 may also be used to notify the regulator and investors of a company's intent to cease filing various required forms because their securities no longer fall under certain filing requirements. A company must have fewer than 300 shareholders to be eligible to file Form 15.
BREAKING DOWN SEC Form 15
Reporting requirements under the Securities Exchange Act of 1934 can be onerous for small publicly listed firms. This is particularly true for these relatively obscure entities that have very little trading of their stock on an exchange. Because of the limited benefits of being public and the significant costs in money, time and effort to prepare and file periodic reports with the SEC, many such firms decide to deregister their securities. They do so by voluntarily filing Form 15. The principal filings — annual reports on Form 10-K, quarterly reports on Form 10-Q and current reports on Form 8-K (in the case of foreign issuers, Form 20-F and Form 6-K) — are no longer required after the filing of Form 15 with immediate effect. However, certain reporting obligations such as proxy statements remain for 90 days following the filing.
Example of an SEC Form 15 Filing
On December 28, 2017, Talon International, Inc., a zipper and apparel fasteners manufacturer, filed a Form 15 "after a detailed analysis and thoughtful deliberation of the advantages and disadvantages of being an SEC reporting company." The company's board of directors considered the costs associated with the preparation and filing of reports, including the costs of outside legal and accounting resources, amount of management time spent on the documents, the amount of trading of the common stock, and the views of its largest shareholders. The resources, the company concluded, could be better spent on business operations.