Understanding the intricacies of SEC reporting requirements can be daunting, especially when it comes to SEC Form 5. It is used by company insiders to submit their annual statements of beneficial ownership SEC. It’s a crucial part of the Section 16 filing requirements and provides a treasure trove of information for investors, analysts, and compliance professionals.

This article explains the Form 5 transaction codes in Tables 1 and 2, helping filers and investors better understand the data disclosed.

Breaking Down the Codes: Form 5 Table 1, Column 3

Table 1, referred to as the “Statement of Ownership,” records the securities a filer beneficially owns at the close of the issuer’s fiscal year. This is a core part of Form 5 reporting requirements and ensures compliance with Form 5 disclosure rules.

Filers must list each class of securities, the number owned, and indicate ownership type—direct (D) or indirect (I). If indirect, they must explain the nature of ownership.

Common Form 5 insider transactions in Table 1 include:

• P: Open market or private purchase of non-derivative or derivative security
• S: Open market or private sale
• A: Grant, award, or acquisition under Rule 16b-3(d)
• D: Disposition to issuer under Rule 16b-3(e)
• F: Payment of exercise price or tax liability by delivering/withholding securities
• I: Discretionary transaction under Rule 16b-3(f)
• M: Exercise or conversion of derivative security under Rule 16b-3
• G: Bona fide gift
• L: Small acquisition under Rule 16a-6
• W: Acquisition or disposition by will or laws of descent and distribution
• Z: Deposit into or withdrawal from voting trust

These codes also apply to holdings or transactions that appear on SEC Form 3, Form 4, or Form 5, but haven’t been previously reported.

Deciphering the Codes: Form 5 Table 2, Column 4

Table 2, titled “Statement of Changes in Beneficial Ownership,” focuses on Form 5 insider transactions involving changes to securities ownership.

Typical codes include:

• P: Open market or private purchase
• S: Open market or private sale
• A: Grant, award, or acquisition under Rule 16b-3(d)
• D: Disposition to issuer under Rule 16b-3(e)
• M: Exercise or conversion of derivative security under Rule 16b-3
• C: Conversion of derivative security
• H: Expiration or cancellation of long derivative position with value received
• O: Exercise of out-of-the-money derivative security
• X: Exercise of in-the-money or at-the-money derivative security
• G: Bona fide gift
• K: Transaction in equity swap or similar instrument
• U: Disposition pursuant to a tender of shares in a change of control

These codes are important for understanding Form 5 compliance and identifying when trades relate to derivative securities that may be exempt under Rule 16b-3.

Filing Tips and Compliance Best Practices

Meeting Form 5 reporting requirements involves more than just knowing the codes. To ensure accurate and timely Form 5 filing:

• Use the EDGAR filing system for electronic SEC filings to avoid delays.
• Keep detailed transaction records for compliance with Form 5 disclosure rules.
• Understand the differences between Form 5 vs Form 4 to prevent misfiling.
• Stay current with Form 5 instructions from the SEC to avoid late Form 5 penalties.
• If unsure, seek professional guidance on how to file Form 5 with the SEC.

Common Mistakes to Avoid

Even seasoned filers can make errors when reporting deferred transactions. Here’s a quick overview of the most common mistakes—and how you can avoid them:

Getting Started with Your Form 5 Filing

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