Understanding the Transaction Codes for Form 3 Tables 1 and 2

Untangling the labyrinth of financial regulations can be a daunting task, particularly when it comes to understanding the various forms filed with the U.S. Securities and Exchange Commission (SEC). One such document is Form 3 - an initial statement of beneficial ownership filed by the company's insiders. To aid you in your exploration, this article, created for the informative financial resource website, aims to elucidate the transaction codes used in Form 3's Tables 1 and 2.

Form 3 Table 1: Equity Securities Beneficially Owned

Table 1 covers the "Equity Securities Beneficially Owned" and typically contains the initial filing by the company's insiders about their beneficial ownership. As this table serves to declare beneficial ownership rather than record transactions, it does not use transaction codes. The form primarily used for initial statements of beneficial ownership only necessitates awareness of a few transaction codes:

  • A: This stands for the granting, awarding, or other forms of acquiring securities from the company, such as options.
  • D: This signifies discretionary transactions, including orders to buy or sell.

Form 3 Table 2: Derivative Securities Beneficially Owned

On the other hand, Table 2, titled "Derivative Securities Beneficially Owned," incorporates transaction codes to describe the nature of securities transactions. However, being a form used primarily for initial statements of beneficial ownership, there are only a few transaction codes you need to be aware of:

  • A: This code signifies a grant, award, or other acquisition of securities from the company, such as an option.
  • D: This code represents discretionary transactions, including an order to buy or sell.

It's important to keep in mind that, while Form 3 is used to initially declare ownership, only codes A and D are required for any derivative securities transactions.

This guide provides a handy reference for understanding the transaction codes of Form 3's Tables 1 and 2. While they may seem complex initially, being familiar with these codes is the first step towards a more comprehensive understanding of the financial data company insiders report. As you continue to dive deeper into these forms, you'll gain insights that can help shape more informed financial or investment decisions. Happy decoding!

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