What Is SEC Form 18-K?
SEC Form 18-K applies to non-U.S. sovereign governments and their political entities to file annual reports with the Securities and Exchange Commission (SEC). The need to submit the form applies only if the foreign government or its political entities have debt securities registered under Schedule B and have listed the securities on a U.S. exchange willingly. It is more commonly known as the Annual Report for Foreign Governments and Political Subdivisions.
- SEC Form 18-K applies to the debt securities of non-U.S. sovereign governments and their political entities registered under Schedule B and listed on a U.S. exchange.
- Schedule B is part of the Securities Act of 1933 that allows foreign entities and their political entities to offer and sell debt securities in the United States.
- SEC Form 18-K must be filed within nine months of the issuer's fiscal year-end after March 31.
- Extensive information and detail are required to be provided in Form 18-K, such as total debt, imports and exports, material modifications and provisions, gold deposits, and information on the holdings of the securities.
Understanding SEC Form 18-K
Form 18-K states that only entities that have debt securities registered under Schedule B need to file the form. Schedule B is part of the Securities Act of 1933 that allows foreign entities and their political entities to offer and sell debt securities in the U.S.
For non-U.S. governments and their political entities, the SEC requires information from a foreign issuer on an annual basis in order to include anything that could materially affect the long-term solvency of the security or its issuer. This includes a description of the general effect of any material modifications to the rights of security holders and the circumstances of any failure to pay installment payments as originally promised in the security's initial offering.
SEC Form 18-K also requires filers to provide various substantive financial statements, including the latest annual budget of the filer, and statements regarding the indebtedness of the filer. The information is available electronically for all filers through the SEC's Electronic Data Gathering and Retrieval (EDGAR) system.
SEC Form 18-K serves a virtually identical function to SEC Form 10-K, a filing that is commonly associated with the annual report of domestically-based companies. However, the SEC Form 18-K often provides information that investors cannot find elsewhere due to the minimal amount of analyst coverage focused on foreign issuers and even less coverage of their political and municipal subdivisions.
Filing SEC Form 18-K
EC Form 18-K has to be filed within nine months of the issuer's fiscal year-end after March 31. The report has to be filed with the exchange in which the securities are listed as well as with the SEC. Only one copy, however, needs to be signed.
The information required in Form 18-K is comprehensive and covers a wide array of topics and areas. Some of the information to be provided includes the total outstanding of internal funded debt, external funded debt, material modifications, provisions, and circumstances of the failure to pay principal or interest, statements of receipts and expenditures, and a breakdown of the information regarding the holdings of the securities.
Along with providing this information, SEC Form 18-K requires exhibitions of the information to be provided. This includes any copies of amendments or modifications, annual budgets, laws or decrees, and any other documents that might be required. If the information is not in English, both the original documents as well as an English translation need to be provided.