What Is the SEC Form 40-F?

The SEC Form 40-F is a filing with the Securities and Exchange Commission (SEC) required for companies domiciled in Canada but that have securities registered in the United States. Form 40-F is an annual filing that companies must fill out. It is similar to the Form 10-K for U.S.-based companies in purpose and content.

Key Takeaways

  • Canadian companies that have securities registered in the United States need to complete the annual SEC Form 40-F filing.
  • The Form 40-F includes elements such as explaining a business overview, explanations of strategy, end markets served, industry structure, and competitive advantages.
  • The Form 40-F is similar to the Form 10-K required for U.S. companies.

SEC Form 40-F Explained

In accordance with the SEC Exchange Act, a Canadian company that has been subject to reporting to any Canadian regulatory authority for at least 12 months, and has outstanding equity shares valued at US$75 million or more, must file a Form 40-F to register securities that it intends to offer in U.S. markets. After securities commence trading, this Canadian company must update and file the same form on an annual basis. The form is currently uploaded on the SEC website and spans approximately 16 pages.

It should be noted that public companies in Canada that comply with International Financial Reporting Standards (IFRS) for its financial statements are in luck. Typically, the SEC accepts the International Financial Reporting Standards as an equivalent to generally accepted accounting principles (GAAP) in terms of accuracy, comprehensiveness, and rigor in accounting policies and procedures. Therefore, Canadian companies filing with the SEC do not have to reconcile IFRS-prepared numbers to GAAP as an extra step in the process.

Typical Contents on the SEC Form 40-F

A Form 40-F reads very much the same as the Form 10-K that investors are accustomed to seeing for U.S. public companies. The Form 40-F filing begins with a business overview, with explanations of strategy, end markets served, industry structure, and competitive advantages. A management discussion and analysis (MD&A) of at least the two preceding fiscal years is also a prominent portion of the first half of the filing. The filing contains an important risk disclosure section, financial statements with notes to the statements, description of the company's capital structure, list of major shareholders, biographies of directors and executive officers, legal matters, and other material information that an investor relies on. In a nutshell, the SEC Form 40-F is a pretty comprehensive filing showing the intentions, history, and operations of the Canadian company as it relates to securities in the United States.

Form 40-F Versus Form 20-F

Form 20-F, like Form 40-F, is similar to Form 10-K. However, the Form 20-F should not be confused as it is specifically a filing that all non-Canadian foreign private issuers must submit to the SEC to initially register securities for distribution in the U.S. and file on an ongoing basis each year. The SEC Form 40-F is specific to Canadian companies only.