Section 16 Electronic Reporting
Frequently Asked Questions
(Revised August 14, 2003)
The Release 8.6 upgrade to the EDGAR system (effective July 28, 2003) improves the functionality of the online filing system for Section 16 reports on Forms 3, 4 and 5 (including amendments to these forms). Electronic filing of all Section 16 reports became mandatory on June 30, 2003 (see Release No. 33-8230).
We have updated the previously posted version of frequently asked questions (FAQs) about electronic filing of Forms 3, 4, and 5. Previous FAQ 1 has been eliminated as moot. Previous FAQ 2 has been eliminated and previous FAQs 4, 5, 6 and 10 (now 2, 3, 4 and 8, respectively) have been revised due to the improved functionality. Previous FAQs 7 and 13 (now 5 and 11, respectively) have been revised to provide more clarity. Previous FAQ 9 (now 7) has been revised to eliminate the reference to system modification. New FAQs 13 – 16 have been added.
The answers to these FAQs represent the views of the Division of Corporation Finance. They are not rules, regulations or statements of the Securities and Exchange Commission. The Commission has neither approved nor disapproved them.
- Question: In reporting more than one transaction on Form 4, the system requires a holdings entry in each line. If the securities involved in each transaction were owned in the same form (e.g., direct ownership), does this require a running tally?
- Question: In Forms 4 and 5, Column 2 of Table II requires the exercise or conversion price of a derivative security to be reported in dollars. How should I report a conversion or exercise price that is not dollar-denominated (e.g., where convertible preferred stock converts to common stock on a one-for-one basis)?
Answer: Leave the column blank and provide a footnote to the column that explains the applicable conversion or exercise provision (e.g., the security converts to common stock on a one-for-one basis).
- Question: On Table II, Column 2 of Form 3 and Column 6 of Forms 4 and 5 require disclosure, in the form Month/Day/Year, of the date a derivative security becomes exercisable and its expiration date. How do I respond for a derivative security that does not specify one or both of these dates (such as phantom stock acquired under a deferred compensation plan, where both dates would be the insider's retirement date, which is not yet known)?
Answer: Leave the column blank and provide a footnote to the column that describes the applicable terms.
- Question: On Table II, in Column 3 of Form 3 and Column 6 of Forms 4 and 5, how would I disclose that derivative securities vest in four equal annual installments?
Answer: Leave the column blank and provide a footnote to the column that describes the applicable terms, including the annual vesting dates.
- Question: Do I need to file a power of attorney with the filing?
Answer: If the Form is signed on behalf of an individual by another person, the power of attorney establishing the authority of such person to sign the Form must be filed in an exhibit to the Form or as soon as practicable in an amendment to the Form, unless a previously filed paper or electronic power of attorney is still in effect. The power of attorney need only indicate that the reporting person authorizes and designates the named person or persons to sign and file the Form on the reporting person's behalf and state its duration.
- Question: How do I sign the document when I use a power of attorney?
Answer: We recommend that the document signature be the typed signature of the person holding the power of attorney. The remainder of the signature line would then indicate that the person is signing on behalf of the named officer, director or more than 10% shareholder under a power of attorney. For example, John Jones, by power of atty.
- Question: How can I indicate the title of the person filing the Form?
Answer:The title of the person may be included on the same line as the signature.
- Question: What do I do if the address I provided for the insider in the Form ID and automatically generated by the system is not the address I want displayed on a Form 3, 4 or 5?
Answer: You can change the address for purposes of the Form 3, 4 or 5 as you assemble it by clicking on the appropriately labeled buttons that appear in connection with the address during assembly. In order to change the insider’s address for purposes of the EDGAR system in general, however, you must change the address on the Edit Company Information page of either the EDGAR Online Forms Website or the EDGAR Filing Website or submit by fax an amended Form ID. We recommend that you use a website, which is faster.
- Question: On Form 4, what date should be entered for Item 3 (Date of Earliest Transaction Required to be Reported)?
Answer: The date in Item 3 should be the transaction date of the earliest transaction reported that you are required to report on Form 4. This is the same date you enter in Column 2 of Table I (or Column 3 of Table II), not the Deemed Execution Date you would enter in Column 2A of Table I (or Column 3A of Table II). Where the transactions reported on the Form 4 include a transaction that the insider previously failed to report timely on Form 4, the transaction date for that transaction should be entered in Item 3. (This answer updates Q. 28 in the Division's Sarbanes-Oxley Act Frequently Asked Questions revised November 14, 2002.)
- Question: What date should be entered for Item 3 on a Form 4 filed solely to report voluntarily a transaction that is eligible for deferred reporting on Form 5, such as a Rule 16b-5 gift or a Rule 16a-6(a) small acquisition?
Answer: Enter the transaction date reported in Column 2 of Table I (or Column 3 of Table II). In reporting the transaction, make sure that "V" is designated in Column 3 of Table I (or Column 4 of Table II).
- Question:Do all officers and directors need filing codes?
Answer:Yes, each officer, director and more than 10% shareholder will need his/her own CIK, CCC and Password codes. The codes are needed whether the insider is filing as an individual or as part of a group. It is very important to use the insider’s CIK rather than, for example, the issuer’s CIK, so that users can readily identify the insider filing the form (if the wrong CIK has been used, file a new form with the correct CIK). Only one set of codes is permitted even if the filer is an officer, director, or more than 10% shareholder of more than one company. We strongly recommend that companies applying for codes on behalf of their insiders verify that the persons do not already have codes assigned to them.
Insiders may apply for codes by submitting a completed Form ID by FAX to the EDGAR Filer Support Office at (202) 504-2474. Companies applying for codes on behalf of their insiders may use one Form ID by listing the full name and address of each insider in an attachment to the Form. The company must, however, provide powers of attorney permitting the company to apply for codes on the insiders’ behalf.
- Question:When filing an amendment to a Form 3, 4 or 5, the system requires the entry of a line of information into Table I or II unless, in the case of Form 3, it is indicated that there are no holdings required to be reported or, in the case of Forms 4 and 5, the box is checked indicating that the filer no longer is subject to Section 16. The revised forms include new instructions that expressly address amendments. They essentially state that a line should be provided in an amendment's Table I or II only where the line is being added or is the revised version of a line previously reported. How do I file an amendment that does not add or revise any previously reported lines (e.g., an amendment to show that a more than 10% shareholder also is a director)?
Answer:Until the system is modified, the amendment should report a line of information previously reported on the form. Indicate in a footnote the purpose of the amendment and that the holding or transaction is not new or revised but is being reported again to gain access to the system.
- Question:How do I file a joint filing for more than ten insiders, given that the system accepts a maximum of ten insider CIKs on a form?
Answer:In order to file jointly for more than ten insiders, file as many additional forms, with up to ten insiders on each, as needed and place a footnote on each of the forms that cross-references the other forms, contains a list of the insiders filing on the other forms and explains the reason for the multiple forms.
- Question:What information do I report for the issuer’s ticker or trading symbol if there is none?
- Question:Section 16(a)(3)(B) of the Exchange Act, as amended by the Sarbanes-Oxley Act of 2002, states, in part, that Forms 4 and 5 “shall indicate ownership by the filing person at the date of filing.” Does this mean that I must report my ownership of all classes of equity securities of the issuer each time I file a Form 4 or 5?
Answer:When you file a Form 4 or 5, you need only report your ownership after the transaction or at the end of the fiscal year, respectively, of the class(es) of equity securities of the issuer as to which you report a transaction. Because Section 16 contained the same language before the statutory amendment, the amendment did not expand an insider’s obligation to report post-transaction ownership.
- Question:Can an issuer satisfy its website posting obligation if it posts forms directly in PDF only?
Answer:Assuming an issuer otherwise satisfies the website posting requirements, it is permissible to post forms directly in PDF only if the website explains clearly the need to use Adobe Acrobat to access the forms and provides clear directions on how to download it easily and without cost using a readily accessible link provided on the issuer’s website.