Section 16(a) Reporting on Forms 3, 4, and 5: A Primer

Who

Section 16 covers three classes of person with respect to a company that has a class of equity securities registered under Section 12 of the Exchange Act. The company’s directors, officers, and any beneficial owner of more than 10% of that registered class (these three classes may be collectively referred to as “statutory insiders” or “insiders”). “Officer” is a defined term (Rule 16a-1(f)), and the definition is functional rather than titular, covering the issuer’s president (CEO), principal financial officer (CFO), principal accounting officer (PAO, or, absent one, the controller), any vice president (or other titled executive) in charge of a principal business unit, division, or function, and any other officer or person who performs a policy-making function for the issuer. A title alone neither creates nor avoids status. The person subject to reporting is referred to as the reporting person; the company whose securities are reported is referred to as the issuer. The reporting obligation is personal to the reporting person even where counsel or a compliance function prepares and transmits the filing.

What

Section 16(a) reporting takes place via the filing of three SEC forms: Form 3, Form 4, and Form 5. Form 3 is the initial statement of beneficial ownership, filed on first becoming a reporting person. A person typically becomes a reporting person on being promoted to or appointed as an officer, on being elected or appointed to the issuer’s board of directors, or on crossing ten percent beneficial ownership through a corporate transaction (e.g., a merger) or other share acquisition (e.g., a tender offer). The Form 3 states all securities of the issuer then beneficially owned at the moment in time when the person became a reporting person subject to Section 16(a).

Beneficial ownership is itself a defined term. For determining 10% owner status, Rule 16a-1(a)(1) incorporates the beneficial ownership concept of Rule 13d-3 under Section 13(d): a person is treated as owning not only securities held outright but also any securities the person has the right to acquire within sixty days, for example on exercise of an option or conversion of a security, with such convertible-within-60-days securities included as part of the total number of shares outstanding.

Form 4 reports subsequent changes in beneficial ownership: open-market purchases and sales, option exercises, equity grants and vesting events, and gifts, among other transactions. A single Form 4 may report more than one transaction; transactions occurring on different days can be combined on one report, so long as it is filed by the deadline triggered by the earliest of them. Form 5 is an annual statement covering transactions and holdings eligible for deferred reporting, or that should have been reported earlier and were not; Forms 5 are rarely filed because most transactions are reported on Forms 4. Each form separates non-derivative securities from derivative securities into distinct tables, and footnotes explain the terms and other relevant details that the tables cannot express. Forms 4 disclose all of the registered class (e.g., common stock) and derivative securities of the registered class (e.g., RSUs, PSUs, options, warrants, etc., but not including non-convertible debt) of which the reporting person has a pecuniary interest. The definition of pecuniary interest is nuanced in application, but generally means the opportunity to directly or indirectly profit, or share in any profit, derived from a transaction in the subject securities. Rule 16a-1(a)(2)(i).

The relative volume of the three forms follows from their function. Form 4 is filed on nearly every reportable transaction, while Forms 3 and 5 are bounded by a single event or a single year, respectively. The counts below are every Form 3, 4, and 5 accepted by EDGAR in calendar year 2025.

When

Three deadlines govern when the three forms must be filed on EDGAR to be considered timely. A Form 4 is due before the end of the second business day following the day on which the transaction was executed (i.e., the reporting person makes an irrevocable commitment to execute the transaction). A Form 3 is due within ten calendar days after the person becomes subject to Section 16. A Form 5 is due within forty-five calendar days after the issuer’s fiscal year end. For the two-business-day count, a business day excludes Saturdays, Sundays, and the federal holidays on which EDGAR does not operate; the current schedule is published on the SEC’s EDGAR filing calendar. Where a deadline computed in calendar days lands on a weekend or holiday, it carries to the next business day.

EDGAR accepts submissions from 6:00 a.m. to 10:00 p.m. Eastern Time on business days, which differs from most other filings where the deadline is 5:30 p.m. ET. A transaction that triggers a deadline can therefore still be reported on time up to the 10:00 p.m. cutoff, but not after.

EDGAR submission window

6:00 a.m. to 10:00 p.m. ET, business days only.

Same-day filing date, Section 16 forms

Accepted by 10:00 p.m. ET (not the general 5:30 p.m. cutoff).

Where

Every filing is transmitted electronically through EDGAR, the SEC’s electronic system and public repository for company filings. Each filing becomes available to the public on acceptance. There is no confidential treatment and no embargo: a Form 4 filed at 6:00 p.m. is viewable by anyone, including market participants and the plaintiffs’ bar, as soon as EDGAR has processed and posted it. A filing is also not rescindable. Once filed it remains part of the public record permanently, and can be corrected only by filing an amendment on the corresponding Form 3/A, 4/A, or 5/A.

Why

This Section 16(a) reporting regime is what provides the transparency for shareholder civil enforcement of the Section 16(b) short-swing trading prohibition. Section 16(b) requires a reporting person to disgorge to the issuer any profit realized from a covered acquisition and disposition, or a disposition and acquisition (often referred to as “short-swing,” “opposite-way,” or “matching” transactions), within any period of less than six months. Although it operates on a strict-liability basis, a violation of Section 16(b) is not a crime; the consequence is that the reporting person must disgorge (i.e., cut a check and pay back to the issuer) the amount of the short-swing profits. The calculation of those deemed “profits” could be the subject of its own post; however, the important takeaway is that the deemed profit can exceed the reporting person’s actual economic gain or loss, which is why short-swing trading should be avoided at all costs. Compliance is reinforced from two further directions. SEC rules also require the issuer to identify delinquent filers by name in its proxy statement or annual report, and the Commission has brought enforcement actions against both individuals and issuers for patterns of late reporting.

How

A Section 16 filing is, in the end, a data file written in computer code (XML) that has to conform to EDGAR’s exact requirements. Think of a plug and a socket: the prongs on the plug (the Form) have to fit the number, shape, and size of the socket’s design (the EDGAR schema). Packaging the data this way is a trivial job for a computer, and something Section 16 Agent and other filing services do easily. The harder part is drafting the accurate content of the Form 3, 4, or 5 that goes into the file in the first place. This work has been done by practitioners by hand since the reporting requirement was enacted, slowly typing the disclosure into a Word document or keying it into a dated web-interface.

Section 16 Agent was built to remove that friction and is the first widely available application to automate drafting Section 16 reports. Simply describe the transaction, or several transactions, in the input box the same way you would describe them to a colleague in an email, and Section 16 Agent generates a highly accurate draft for review. It will even generate footnotes tailored to the reporting person and update them from the details in the input. The goal is simple: make filing Forms 3, 4, and 5 effortless.