- ADA Compliance
What is ADA Compliance for Accessible Design?
ADA compliance refers to the Americans with Disabilities Act (ADA) Standards for Accessible Design, which states that all electronic information and online technology must be accessible to people with disabilities. ADA compliance is similar to Section 508, however compliance with Section 508 is required for federally funded companies. Who needs to be ADA Compliant? Organizations that need to adhere to the ADA requirements include: State and local government agencies Private employers with 15 or more employees Businesses that operate for the benefit of the public.
- Annual Enrollment Period (AEP)
When is the Annual Enrollment Period?
The period from October 15 to December 7 when individuals can enroll in a Medicare Advantage plan or a stand-alone Prescription Drug Plan, or switch Medicare plans. If individuals didn’t sign up for one of these plans when they first became eligible for Medicare (during their Initial Enrollment Period), the AEP is generally their chance to make these changes, unless they qualify for a Special Election Period (SEP). For support with AEP preparation and more, explore our Health Insurance Marketing & Communications solutions.
- Annual Meeting
What is the Annual General Meeting (AGM)?
The Annual General Meeting (some may refer to it as the Annual Meeting or the Annual Shareholder Meeting) is a yearly meeting held for the general members/shareholders of an organization. At this meeting, the members review financial performance over the past year, address shareholder questions, and get to vote on key issues. Incorporation laws may vary by state, but in general, every public and private company is required to host its AGM every financial year.
For support with Annual Meetings and more, explore our Annual Meeting and Proxy solutions.
- Annual Meeting Notice
What is an Annual Meeting Notice?
The Annual Meeting Notice is a notice sent to shareholders by publicly-held companies before their annual meeting. The notice is typically a one-page announcement that is included as part of the proxy statement. The goal is to notify shareholders of the date, time, and place of the annual meeting and summarizes the items that will be voted on at the meeting. It also lists options for voting such as online, by phone, or by return mail, and is usually written and signed by the Company’s Corporate Secretary.
For support with Annual Meeting Notice and more, explore our Annual Meeting and Proxy solutions.
- Annual Report
What Is an Annual Report?
An annual report is a company publication provided annually to shareholders detailing a company's operations and fiscal performance over the past year.
Most publicly held companies are required by law to distribute annual reports to shareholders. Annual reporting protects investors and keeps the public informed of company activities. These reports are usually audited, so companies must ensure they’re accurate and distributed in a timely manner.
Annual reports may vary in appearance, ranging from long-form company narratives with slick graphics to basic financial data tables provided by mutual funds. To meet regulatory requirements, annual reports include mandatory accounting disclosures and specific corporate information describing company operations. Most company annual reports also include a letter to the shareholders, financial highlights and summary data, analysis from senior management, product plans, research and development updates and the auditor's report.
Publicly held companies in the US are typically obliged to submit annual reports on Form 10-K to the SEC, though they may choose to distribute a separate annual report to shareholders. Companies may also file their annual reports with the SEC electronically in the EDGAR database system.
For support with Annual Report and more, explore our Annual Meeting and Proxy solutions.
- Annual Notice of Change (ANOC)
What is an Annual Notice of Change (ANOC)?
ANOC is an acronym for Annual Notice of Change, a document that health insurance plans are required by US regulations to provide to their members communicating changes to the coverage effective on January 1 of the upcoming year. The aim of the ANOC is to provide healthcare members with accurate, updated information and adequate time to assess their healthcare options. Under current US regulations, health insurance plans in the US are required to clearly outline any changes in coverage, costs or service area in the ANOC document, which must meet exacting specifications and be delivered to members in September. US healthcare communications are highly regulated, so data collection, formatting and delivery requirements are subject to change. Health insurance plans are expected to be aware of these changes and meet all current, relevant ANOC compliance requirements.
- Compensation Discussion and Analysis
What is Compensation Discussion and Analysis (CD&A)?
Compensation Discussion and Analysis is a Proxy Statement component that covers the discussion of compensation philosophy, for example, pay for performance, performance metrics, performance vesting equity. It shows an overview of the year‘s performance and compensation, performance targets, key compensation decisions made in the past year (i.e. salary changes, incentive plan changes). It also includes a compensation framework, including compensation policies/process and risk considerations, employment agreements, and compensation in comparison to peer group companies.
For support with Compensation Discussion and Analysis and more, explore our Annual Meeting and Proxy solutions.
- Healthcare Content Management System
What is a Healthcare Content Management System (CMS)?
A healthcare content management system (CMS) is a platform used to manage website content and allows multiple people to create, edit and publish in real-time. The value of having a content management system in healthcare is that your data is kept secure, it has workflow features that allow you to collaborate, and allows for flexibility and scalability, along with integration and other features.
- Continuous Disclosure
What is Continuous Disclosure?
In Canada, many public companies are required to disclose specific information about their business and financial status on a regular basis. Amendments are currently being implemented to ensure more consistent application of disclosure requirements and other securities legislation across Canadian provinces and exchanges.
Canada’s National Instrument 51-102: Continuous Disclosure Obligations outlines requirements for disclosure documents, including financial statements, proxies, information circulars, material change reports, management’s discussion and analysis (MD&A), annual information forms (AIFs) and business acquisition reports (BARs).
Public companies and mutual funds are required to provide data that meets current Canadian standards for accounting practices and auditing standards, as described in National Instrument 52-107 Acceptable Accounting Principles, Auditing Standards and Reporting Currency.
For companies other than investment funds, continuous disclosures must be certified in accordance with National Instrument 52-109Certification of Disclosure in Issuers’ Annual and Interim Filings.
Continuous disclosure information is submitted via SEDAR (System for Electronic Document Analysis and Retrieval), Canada’s electronic filing system for disclosures.
Foreign issuers are exempt from some continuous disclosure requirements, as described in National Instrument 71-102, Continuous Disclosure and Other Exemptions Relating to Foreign Issuers.
- Corporate Sustainability Report
What is a Corporate Sustainability Report?
A Corporate Sustainability Report (CSR) is a report published by companies to show their environmental and social responsibilities and their results. Overall, it is a way to show internal and external stakeholders the company’s commitment to sustainability.
For support Corporate Sustainability Reports and more, explore our Annual Meeting and Proxy solutions.
- COSO 2013
What is COSO 2013?
The Committee of Sponsoring Organizations of the Treadway Commission (COSO) created a framework that companies can adopt to monitor and evaluate their internal controls. The framework contains five components:
Information and Communication
Explore the solutions Toppan Merrill offers on our Automated SOX Compliance page.
- SEC Form D
What Is SEC Form D?
SEC Form D, also known as Reg Dex or Reg D, is required for companies and funds offering and selling securities without registration under the Securities Act of 1933 in reliance on an exemption provided in Regulation D or Section 4(a)(5). The form must be filed within 15 days after the first sale of securities.
SEC Form D comprises brief information about the company, its executive officers and stock promoters, the amount and value of the securities sold and the date of first sale. The form is intended to prevent fraud in the sale of the offered securities by requiring significant information on those securities be made easily accessible to investors.
A number of SEC Form D filings are made by startups raising capital through venture capital and angel investors as well as certain pooled investment funds.
Form D is filed in XML format and must be filed using the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system. Once the Form D submission has been accepted, it can be accessed by the general public via SEC.gov.
- De-SPAC transaction
What is a de-SPAC transaction?
A de-SPAC transaction is a company merger of the Special Purchase Acquisition Company (SPAC), the buying entity, and a target private business. By SEC proxy rules, as a public company the SPAC must obtain shareholder approval of an intended merger. Obtaining shareholder approval for the proposed merger requires holding shareholder meetings, filing proxy statements and obtaining approval from the SEC which can take months. With shareholder and SEC approval, the SPAC can file an 8-K form with the SEC to complete the merger.
- Debt Offerings
What is a Debt Offering?
A Debt Offering is a common means to finance large purchases that a company could not otherwise afford. A debt arrangement provides capital under the condition that it is to be paid back later, usually with interest. Bonds, loans and commercial paper are all examples of debt, and all have stated interest schedules and maturity dates. By using debt as a tool to raise capital, a company avoids issuing additional stock and the associated dilution of stock value and shareholder income.
- Form DEFM14A
What is Form DEFM14A?
Form DEFM14A must be filed with the Securities and Exchange Commission (SEC) prior to a merger or acquisition that will require a shareholder vote. Under The Securities Exchange Act of 1934, the form is meant to uphold shareholders' rights by providing them with enough information to enable them to vote at a security holders' meeting or via a proxy vote that they authorize.
Also known as the “definitive statement relating to merger or acquisition,” each filed DEFM14A is displayed publicly online using the SEC's EDGAR (Electronic Data Gathering, Analysis and Retrieval) system.
The filing includes: date, time and place of the meeting of security holders; revocability of proxy; dissenter's right of appraisal; individuals making the solicitation; direct or indirect interest of certain persons; modification or exchange of securities; financing information and financial statements; risk factors; voting procedures; acquisition or disposition of property; amendment of charter, bylaws, or other documents; and other key details.
- Dodd Frank Act
What is The Dodd-Frank Act?
The Dodd-Frank Act of 2010, also known as the Dodd-Frank Wall Street Reform and Consumer Protection Act, comprises 2,000 pages of federal rules and regulations for financial institutions and their customers. Named after its Democratic sponsors, US Senator Christopher J. Dodd and US Representative Barney Frank, Dodd-Frank was passed in July of 2010 as a means of preventing the events that triggered the 2008 financial crisis from happening again.
The largest financial regulation revamp of its kind since the Great Depression, Dodd-Frank led to the creation of a number of new government bodies, including a Consumer Financial Protection Bureau (CFPB) to protect retail customers from predatory mortgage lending and reduce incentives for mortgage brokers to get home buyers to take on more costly loans. The CFPB now requires loan terms to be communicated in an easy-to-understand, simplified format.
Dodd-Frank has also spawned the Financial Stability Oversight Council, charged with keeping an eye out for potential threats to the financial system. It also created the Orderly Liquidation Authority, which was set up to facilitate the liquidation or restructuring of a large financial company that’s close to failing and thereby preventing a far-reaching economic collapse.
The Dodd-Frank Act also makes it mandatory for companies active in the oil, gas and minerals industries, that file forms annual reports with the Security and Exchange Commission (SEC), to report all payments made to governments on Form SD.
What is EDGAR?
EDGAR (Electronic Data Gathering, Analysis and Retrieval) is the Security and Exchange Commission’s automated, online database where corporate regulatory filings are submitted and displayed. The system collects, validates, indexes, accepts and forwards regulatory submissions, also enabling the public at large to search and view filings freely on the web or via FTP.
The SEC implemented EDGAR in order to improve efficiency and transparency around corporate filings. All publicly traded companies use EDGAR to submit required, time-sensitive documents to the SEC.
Documents that must be filed via EDGAR include annual and quarterly statements, tender offers, information regarding institutional investors’ holdings, Schedule 13D and other key filings, many of which are the most important to investors and analysts. Except in the case of investment companies, actual annual reports to shareholders don’t need to be submitted on EDGAR, although some companies do so voluntarily.
Certain filers must submit various official EDGAR filings in Interactive Data format, using the eXtensible Business Reporting Language (XBRL).
EDGAR was phased into use over a three-year period ending May 6, 1996. Consequently, filings from that date and earlier may not be included in the system due to a hardship exemption made for hardcopy paper filings.
- Employee Plan Participant
What is an Employee Plan Participant?
An Employee Plan Participant is when an employee or former employee owns stock in a corporation through a company-managed stock participation plan (Employee Stock Purchase Plan, Employee Stock Ownership Plan).
For support with Employee Plan Participant and more, explore our Annual Meeting and Proxy solutions.
- Environmental, Social, Governance (ESG)
What is Environmental, Social, Governance (ESG)?
Environmental, Social, Governance (ESG) are three key standards used to evaluate a company’s corporate responsibility and can affect their reputation with investors. Environmental initiatives are examined based on a company’s impact and steps toward improving the environment. Social is examined by how companies build and maintain relationships both internally in the organization and externally with the community. Lastly, investors evaluate governance initiatives by examining a company’s leadership and how they operate internally.
For support with ESG and more, explore our Annual Meeting & Proxy solutions.
- Evidence of Coverage (EOC)
What is an EOC?
EOC is an acronym for Evidence of Coverage, a document that details plan coverage, a member’s rights and responsibilities as well as the associated costs each year. Healthcare providers are required by US regulations to provide the EOC, also referred to as a certificate of coverage, to each and every member. The aim of the EOC is to provide healthcare subscribers with accurate information and adequate time to assess their healthcare options before the new year of coverage begins in January.
Under current US regulations, healthcare providers in the US are required to clearly outline coverage, including limitations and exclusions of that coverage, and associated costs to members in the EOC document, which must meet exacting specifications and be delivered to members in September.
US healthcare communications are highly regulated, so data collection, formatting and delivery requirements are subject to change. Healthcare providers are expected to be aware of these changes and meet all current, relevant EOC compliance requirements.
- Equity Offering
What is an Equity Offering?
An equity offering is a public sale of shares of a company for the purpose of raising capital. An equity offering can happen as an Initial Public Offering (IPO), a SPAC IPO, or a Follow-on Public Offering (FPO) or Secondary Offering if the company’s stock is already being traded. In either event, the goal is to raise capital for the company. Raising capital allows a company to make new acquisitions, fund growth initiatives or finance debt.
- ESMA (European Standards Market Authority)
What is ESMA?
The European Securities and Markets Authority (ESMA) was formed in January 2011, and is a European Union financial regulatory agency and European Supervisory Authority, located in Paris.
ESMA works in the field of securities legislation and regulation to improve the functioning of financial markets in Europe, strengthening investor protection and co-operation between national competent authorities.
The idea behind ESMA is to establish an “EU-wide financial markets watchdog”.
As an example of regulations handed down by ESMA, starting in 2022 they are implementing the ESEF mandate which defines iXBRL as the reporting standard for filers.
- Explanation of Benefits (EOB)
What is an Explanation of Benefits (EOB)?
An EOB is a statement from your health insurance plan describing what costs it will cover for medical care or products you’ve received. The EOB is generated when your provider submits a claim to the health insurance plan for the services you received. The insurance company sends an EOB to help make clear: The cost of the care received money saved by visiting in-network providers and any out-of-pocket expenses you are responsible for support.
- xHTML (eXtensible HyperText Markup Language)
What is xHTML?
Over the past few decades, companies have moved toward increasingly stylised annual reports — often available via the web, using HTML (HyperText Markup Language, essentially the most common language of web pages). xHTML (eXtensible HyperText Markup Language) takes HTML and adds a layer of machine-readable metadata.
- Follow-on Offering
What is a Follow-on Offering?
A Follow-on Offering, also known as a Follow-on Public Offering (FPO) is the creation and sale offering of stock from an already publicly traded company. In a Follow-on Offering, the public company creates or issues new shares and offers them for public sale typically to raise capital for business growth strategies. In this scenario, proceeds from the sale go to the company issuing the stock. Adding the number of shares available to the public market is a dilutive secondary offering meaning that the addition of new stock to the public market dilutes the value of the previously issued stock. Like with an Initial Public Offering (IPO), there are SEC document filings required for companies wanting to execute a Follow-on Public Offering.
- Form 10-K
What is Form 10-K?
Form 10-K is used to register securities with the Securities and Exchange Commission (SEC) for trade on US exchanges. Also known as the General Form for Registration of Securities, it provides essential information including the type and amount of security being issued, the issuer’s financial information, and potential opportunities and conflicts of interest. Once filed, Form 10 is made publicly available on the SEC’s online filing system, EDGAR (Electronic Data Gathering, Analysis and Retrieval).
Used by both private and public companies, SEC Form 10-K can be filed voluntarily, with no revenues, assets or minimum shareholder requirements. However, the form is required of security issuers with more than US$10 million in total assets and 750 or more shareholders on record. It fulfills disclosure requirements from The Securities Exchange Act of 1934, but can also be used for accelerated and small business filings.
Form 10-K is a fundamental source of information about publicly traded security—everyone from private investors to financial analysts uses this form to make investment decisions.
- Form 10-Q
What is Form 10-Q?
Form 10-Q is a performance report that public companies are required to file with the Securities and Exchange Commission (SEC) on a quarterly basis for the first three quarters of the fiscal year. In accordance with The Securities Exchange Act of 1934, it provides investors with an ongoing, comprehensive view of a company’s financial position during the year, including unaudited financial statements.
Form 10-Q offers similar information to the annual Form 10-K—filed after the fourth fiscal quarter—but is normally unaudited and in less detail. Each quarterly report generally compares the prior quarter to the current one, and the same quarter last year to the current one.
A company’s Form 10-Q must be provided to any shareholder upon request, though 10-Qs are usually made available on the website of larger companies in the Investor Relations or similarly termed section. All Form 10-Qs filed with the SEC are also publicly available on the SEC’s online EDGAR (Electronic Data Gathering, Analysis and Retrieval) system.
- Form 20-F
What is Form 20-F?
Form 20-F is the primary disclosure document required of foreign private issuers listing equity shares on exchanges in the United States. It’s most often filed with the Securities and Exchange Commission (SEC) as an annual report but is also used to register classes of securities. Companies with fewer than 50% of its voting shares held by US investors can file this form.
Under both the Securities Act and the Exchange Act, Form 20-F is meant to help standardize reporting requirements so investors can evaluate foreign-based companies’ equities alongside US-based companies’ equities. Accordingly, Form 20-F disclosures are very similar to those required of US issuers, reporting information such as key operational details, market risks, corporate governance and financial statements.
However, there are two main differences. First, if a foreign private issuer prepares financial statements in accordance with home-country accounting standards or not to IASB (International Accounting Standards Board) IFRS (International Accounting Standards Board International Financial Reporting Standards), it must also furnish reconciliation with US GAAP (Generally Accepted Accounting Principles). Second, foreign private issuers are allowed to disclose executive compensation in aggregate and don’t have to provide a Compensation Discussion & Analysis.
Form 20-F is filed and displayed publicly on the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system.
- Form 40-F
What is Form 40-F?
Also called the Registration and Annual Report for Canadian Securities Form, Form 40-F is a filing with the US Securities and Exchange Commission (SEC) used by Canadian companies that want to offer their securities to United States investors.
In addition to being used to register Canadian securities in the United States, Form 40-F provides investors with valuable insight into the Canadian companies offering them. After the first filing with the SEC, the form is thereafter used by Canadian companies to provide their annual report. The form not only supplies standard information about the security and the company, it also gives the domestic and Canadian contact information for the securities issuer.
Form 40-F may be used by a company that’s incorporated or organized in Canada, is a foreign private issuer or crown corporation, has been subject to reporting to any Canadian regulatory authority for at least 12 months, and possesses outstanding equity shares valued at US$75 million or more, or a Form F-9 filed with the SEC on or before Dec. 30, 2012.
Once filed, Form 40-F is accessible to public scrutiny on the SEC’s online system, EDGAR (Electronic Data Gathering, Analysis and Retrieval).
- Form 425
What is Form 425?
Form 425 is a document prepared by companies and filed with the SEC disclosing information related to their business combinations, whether that is through a merger or an acquisition. Public companies are required to disclose information about their business combinations or any other information that may be relevant to their shareholders.
For support with Form 425 and more, explore our Capital Markets Transactions solutions.
- Form 6-K
What is Form 6-K?
Form 6-K is submitted by certain foreign private issuers to the US Securities and Exchange Commission to keep investors aware of information the issuers distribute outside of the United States.
The only SEC submission required of foreign issuers outside of annual reports, this Exchange Act form aims to ensure cross-border transparency of information and investor protection. Form 6-K is used to report any material information that a foreign issuer makes public in its home country, files publicly with its home country stock exchange, or distributes to its security holders.
From 6-K also serves as a means of reporting any other significant information arising between annual reports and often includes copies of the foreign issuer’s latest financial reports, like income statements, cash-flow statements and balance sheets.
Foreign issuers submit Form 6-K to the SEC electronically. It’s displayed publicly using the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system. A record that shows “6-K/A” is an amended Form 6-K, submitted when material information has changed.
- Form 8-K
What is Form 8-K?
Whenever a US public company experiences any event of importance to shareholders or the SEC, whether a major material event or significant corporate change, Form 8-K must be filed with the Securities and Exchange Commission (SEC) within four business days. The form gives the name and description of the events and includes relevant exhibits, like press releases, financial statements and data tables. It serves as an update to Form 10-Q quarterly reports and Form 10-K annual reports that the company already has on file with the SEC.
In compliance with The Securities Exchange Act of 1934, Form 8-K announces events—like an acquisition, bankruptcy, removal of a director or change in the fiscal year—on a current, as-needed basis. The wide variety of events that warrant filing the form can be related to a company’s business and operations, accounting and finances, market performance and activities, corporate leadership, asset-backed securities, regulation fair disclosure (FD) and other areas of interest.
Form 8-K filings are displayed publicly on the SEC’s online database, EDGAR (Electronic Data Gathering, Analysis and Retrieval). Most large companies also make their Form 8-Ks available on their own websites, in the Investor Relations or similarly titled section.
- Form DEF 14A
What is Form DEF 14A?
Also called a “definitive proxy statement,” Form DEF 14A is intended to furnish security holders with adequate information to be able to vote confidently at an upcoming shareholders' meeting. It’s most commonly used with an annual meeting proxy and filed in advance of a company’s annual meeting. The statement must be filed with the Security and Exchange Commission (SEC) by or on behalf of the firm soliciting shareholder votes.
Under The Securities and Exchange Act of 1934, Form DEF 14A ensures that shareholders receive crucial voting information including: when and where a shareholder meeting will be held; voting information and procedures; revocability of proxies; procedure for submitting stockholder proposals; background on the company’s nominated directors; top shareholders and holding details; potential conflicts of interest among directors; board and executive compensation, with details including perquisites; audit fees and committee; and other important details.
When a definitive proxy statement is distributed to shareholders, it’s also filed with the SEC. It becomes public record, available for anyone to view on the SEC's online filing system EDGAR (Electronic Data Gathering, Analysis and Retrieval).
For support with Form DEF 14A and more, explore our Annual Meeting and Proxy solutions.
- Form F-3
What is a Form F-3?
F-3 is the name of the SEC securities registration form that foreign companies wishing to be listed on a US Exchange must file and attest to their business history. Like an F-1, the F3 Form Filing collects and presents information that investors can use to determine if they want to invest in the company. There are specific parameters for a foreign company to qualify to file with the SEC such as they must not have had a delinquent filing, not have failed to pay dividends or defaulted on debt or a lease. An F-3 Form Filing provides valuable information and transparency about foreign company wishing to trade in U.S. markets.
- Form F-1
What is Form F-1?
Form F-1 must be filed with the US Securities and Exchange Commission (SEC) by certain foreign private issuers before they can make an IPO (initial public offering) or other first-time security offering in the United States. The form also serves as a catchall, used to register foreign-issued securities for which no other form is already authorized or prescribed. It doesn’t need to register an entire worldwide equity or debt offering, but it must register those securities to be sold in the United States as well as any possible flow-back of securities into the US.
Required under the Securities Exchange Act of 1933, Form F-1 is intended to protect investors by providing critical information including a prospectus overview, risk factors, planned use of proceeds, corporate structure, financial and debt data, taxation and more.
The form must be submitted to the SEC via the online EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it goes on public display. Form F-1 takes an average of nearly 2,000 hours to complete, according to the SEC.
- Form NMFP
What Is Form N-MFP?
Registered money market funds use Form N-MFP to report their portfolio holdings and other information to the US Securities and Exchange Commission (SEC) on a monthly basis.
Under the Investment Company Act of 1940, the form discloses information such as series-level and class-level details about the fund, its schedule of portfolio securities—including net and shadow net asset values, daily and weekly liquid assets and weekly shareholder flows—and basics such as whether the fund is liquidating or merging.
Each Form N-MFP covers one calendar month and must be filed by the money market fund within five days after the end of the month. After 60 days, the filing is displayed publicly on the SEC’s online database EDGAR (Electronic Data Gathering, Analysis and Retrieval) to enable the SEC to better monitor the fund and inform and protect investors.
- Form NSAR
What Is Form N-SAR?
Registered investment management companies use Form N-SAR to disclose information about fund operations and portfolio holdings. Filed with the Securities and Exchange Commission (SEC) on a semi-annual basis, the form protects investors by providing basic information to help them choose a company to trust with their investments.
In compliance with Section 30 of the Investment Company Act of 1940, Form N-SAR provides some detail on an investment management company's leadership, advisors, underwriters and affiliations. In addition, it gives financial information also included in a company’s annual or semi-annual shareholder reports, such as sales of shares, portfolio turnover rate, income and expenses, and total assets and income distributions per security type. The Act eliminated the requirement that a registered investment company’s principal executive and financial officers certify Form N-SAR.
Form N-SAR is filed using the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it can be viewed freely by the public.
- Form S-1
What Is Form S-1?
Required by the Securities and Exchange Commission (SEC), a Form S-1 is the initial registration that must be filed by a United States company in advance of an Initial Public Offering (IPO). SEC Form S-1 is also known as the registration statement under The Securities Act of 1933 and a registration is required before a security can be offered on a public exchange like the NYSE, NASDAQ or AMEX exchanges. (Foreign companies may register with the SEC but would use the SEC Form F-1 instead.) In the Form S-1, companies are required to furnish the details on their business model, planned use for capital proceeds, price per share and detailed financials. A filing company must also furnish a prospectus, offering price methodology and information whether any dilution to other listed securities will occur. In addition, the company will need to submit a disclosure of any material business conducted between the company and its directors and external counsel.
Like other forms, the submission is entered into the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) online filing system.
Once filed, the Form S-1 becomes public record, enabling potential investors to conduct due diligence before shares become available. However, since April 2012, the JOBS Act allows emerging growth companies to keep their Form S-1 confidential up to 21 days prior to their IPO road show. Form S-1/A is used for filing amendments to a previously filed Form S-1.
- Form S-11
What is Form S-11?
A registration statement under The Securities Exchange Act of 1933, Form S-11 must be filed with the Security and Exchange Commission (SEC) by any real estate investment trust (REIT) or other company owning real estate for investment purposes, if it intends to offer securities.
A trust or company files the completed Form S-11 in the SEC online filing system, EDGAR (Electronic Data Gathering, Analysis and Retrieval). Its purpose is not only to register the securities to be issued, but also to disclose crucial information to all potential investors where it can be publicly viewed.
Form S-11 is submitted with information including prospectus details, pricing, plans for use of proceeds, operating data, selected financial data, investment and other financial policies and other reporting described by SEC Regulation S-K.
- Form S-3
What is Form S-3?
Form S-3 is a simplified form for registering securities with the Securities and Exchange Commission (SEC). The form can be used by a company to register securities under the Securities Act of 1933, instead of using Form S-1. Form S-3 is intended to disclose essential company and stock information to potential investors, commonly before the initial public offering (IPO) of common stock or preferred stock.
For a company to qualify to use Form S-3, however, it must be based in the United States only and have met specified dividend and debt requirements as well as all reporting deadlines and requirements under sections 12 or 15(d) of The Securities Exchange Act of 1934 for a minimum of 12 months—including an annual Form 10-K, quarterly Form 10-Qs and periodic Form 8-Ks.
Form S-3 calls for a prospectus, which will ultimately be distributed to potential investors, and it includes undertakings, exhibits and disclosures that become publicly viewable on the SEC EDGAR (Electronic Data Gathering, Analysis and Retrieval) online filing system.
Filing a Form S-3 offers distinct time and cost savings over filing a Form S-1.
- Form S-4
What is Form S-4?
Form S-4 must be submitted to the Securities and Exchange Commission (SEC) by a publicly traded company involved in a merger or acquisition between companies or by companies carrying out a business exchange offer.
Also called a registration statement under The Securities Exchange Act of 1933, Form S-4 is intended to curtail fraud by requiring companies to furnish details related to share distribution, terms and amounts, as well as any other key merger or exchange offer information. (Exchange offers occur when a company offers to exchange securities for similar securities at less demanding terms, often in an attempt to avoid bankruptcy.)
The completed Form S-4 needs to be EDGARized and, once filed, becomes publicly viewable in the SEC online filing system, EDGAR (Electronic Data Gathering, Analysis and Retrieval).
Submissions of Form S-4 are kept under close watch by investors seeking opportunities for fast gains from mergers and acquisitions (M&A) deals.
- Form SEC 1 A
What Is SEC Form 1-A?
SEC Form 1-A is an offering statement required by the Securities and Exchange Commission (SEC) for the registration of certain securities that are qualified under Regulation A.
- ICFR (Internal Controls over Financial Reporting)
What is ICFR?
Internal Controls over Financial Reporting, or commonly referred to as ICFR, are designed to protect and enhance the accuracy and transparency of financial reporting data by public companies. This is prevalent in the Sarbanes-Oxley (SOX) Act, which requires companies to disclose their financial practices.
- IFRS (The International Financial Reporting Standard)
What is IFRS (International Financial Reporting Standards)?
The IFRS Taxonomy is a list of elements, and their relationships, which reflect the presentation and disclosure requirements of the International Financial Reporting Standards (IFRS). These elements, or tags, are used to mark-up IFRS financial statements so they can be communicated in a standardized, computer-readable format. For investment and insurance companies or corporations the requirements are different, but the importance is just as high for each.
International Financial Reporting Standards are a set of accounting principles initially outlined to harmonize EU practices that has become a de facto global accounting standard. Since 2001, the International Accounting Standards Board (IASB) has taken responsibility for codifying and developing IFRS principles to achieve the harmonization necessary to support global financial reporting.
The IASB also develops and maintains the IFRS Taxonomy, which is similar to a dictionary of financial reporting items. By selecting tags from the IFRS Taxonomy which match the related disclosures in the company’s IFRS financial statements, the company is able to prepare computer-readable financial statements in an XBRL (eXtensible Business Reporting Language) format, which is required by various regulators.
- Investment Company Act of 1940
What is The Investment Company Act of 1940?
Considered one of the most important pieces of regulation governing the US stock market, the Investment Company Act of 1940 is a law that Congress passed to define and regulate mutual funds and closed-end funds as well as hedge funds, private equity funds and holding companies. Enforced by the Investment Management division at the Securities and Exchange Commission (SEC), it is intended to “mitigate and eliminate the conditions which adversely affect the national public interest and the interest of investors.”
The Investment Company Act of 1940—along with the Investment Advisers Act of 1940—was put in place in response to the Wall Street crash of 1929 and the ensuing Great Depression. The Investment Company Act’s purpose was to build investor confidence in investment companies—which were relatively new at that time—by reducing conflicts of interest. It was also intended to protect the public interest by requiring investment companies disclose key information concerning their financial health, structure, investment policies and objectives using Form N-SAR.
Under this act, investment companies with more than 100 investors are required to register with the SEC. They are also required to have a board of directors, with 75% of board members being independent. Additionally, the Act requires mutual funds to limit the use of leverage and maintain a certain amount of cash that will cover investors who want to sell their shares at any time.
With the advent of the Dodd-Frank Act of 2010, the Investment Company Act of 1940 received various updates including new regulations around mutual and hedge funds. That said, a number of hedge funds are able to exempt themselves from the Investment Company Act based on Sections 3(c)(1) and 3(c)(7).
The SEC does not supervise or make specific judgments on the investments an investment company chooses to make. Certain commodity pools as well as managed future funds do not fall under the Act’s jurisdiction.
- IPO Prospectus
What is an IPO Prospectus?
An IPO Prospectus is an SEC required document that includes a description of the company and its operations, the terms and conditions of the initial stock offering, and any other information an investor may need to decide to invest. By reading the prospectus, an investor can learn the details of the terms of the securities, the company’s financial condition, business strategy, business management, perceived risk factors, planned use of capital and more to help determine the merit of their investment.
- ISO 13485 2003
What is ISO 13485:2003?
ISO 13485 is based on ISO 9001 with a focus on the design, development, production and installation of medical devices and related services. This standard emphasizes “maintaining” effectiveness of processes, rather than the “continual improvement” that is stressed in ISO 9001. Requires more documentation, monitoring and measurement of data, risk management processes, stresses the need to “maintain effectiveness” of the system.
- ISO Standards
What is ISO (International Organization for Standardization)?
ISO is an acronym for International Organization for Standardization, the Geneva-based non-governmental organization that is the world's largest developer and publisher of voluntary international standards. The ISO currently includes members from 162 countries, with 3,368 technical bodies responsible for standards development.
Since 1946, the ISO has published more than 19,500 international standards for industries ranging from agriculture to technology. These specifications enable investors and consumers to assess their options consistently across businesses, borders and languages. They also provide baseline measures for progress in emerging fields, from software security to renewable energy.
ISO standards establish exacting, world-class trade specifications for quality, safety and efficiency in goods and services. Meeting current ISO standards is a rigorous process with industry-specific documentation requirements, and can prove time-intensive even with the fast-track process.
- Jumpstart our business startups (JOBS) Act
What is the Jumpstart Our Business Startups (JOBS) Act?
The Jumpstart Our Business Startups (JOBS) Act was passed by Congress and signed into law by President Barack Obama to encourage funding of small businesses and startups in the US. Comprising seven titles, it was designed to relax federal regulations and allow for equity crowdfunding, making it easier for companies to access funding while giving individuals a chance to invest in private companies.
The Access to Capital for Job Creators and Crowdfunding acts make up Titles II and Titles III, which are the two key sections of the JOBS Act. Their goal is to lower the barrier for accessing financing for startups. Title II spawned Rule 506(c) of Regulation D, a securities exemption that lets companies publicly advertise investment offerings, which are then open to investment from high net-worth individuals—also known as accredited investors. Meanwhile, Title III of the JOBS Act allows individuals with a net worth below $100,000 to buy shares in privately held companies that want to raise up to $1 million in a 12-month period.
Title IV, the Small Company Capital Formation Act, updates Regulation A as a means of lowering compliance costs to make it easier for small public offerings of securities—not exceeding $5 million in any 12-month period—to register with the Securities and Exchange Commission (SEC).
As for Title I of the JOBS Act, this is also known as the Reopening American Capital Markets to Emerging Growth Companies Act, while Titles V to VI cover registration and deregistration requirements pertaining to the Securities Exchange Act of 1934. Title VII is also called the Outreach on Changes to the Law or Commission.
Companies conducting an equity crowdfunding offering are required to file Form C (Crowdfunding) with the SEC as well as disclose certain information to investors. This information includes the price of the securities; the target offering amount; the company’s financial status; financial statements; information on officers, directors and various owners; as well as an annual report.
- Form MA
What Is Form MA?
Form MA, or the Municipal Advisor Form, must be filed with the Securities and Exchange Commission (SEC) by municipal advisors. A municipal advisor is “a person (who is not a municipal entity or an employee of a municipal entity) providing advice to or on behalf of a municipal entity or obligated person with respect to municipal financial products or the issuance of municipal securities, or that undertakes a solicitation of a municipal entity or obligated person.”
The requirement for filing Form MA, as mandated by Section 975 of the Dodd-Frank Act—and which amended Section 15B of the Securities Exchange Act of 1934, went into effect on July 1, 2014. According to Section 15B, it’s against the law for any municipal advisor to provide counsel—and receive fees—on when to issue securities and how to invest the profits from their sales without disclosing this activity via SEC Form MA, unless an exemption applies.
Form MA must be filed with the SEC in XML (extensible Markup Language) format via the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system.
Every municipal advisory firm must renew Form MA each year by filing an annual update within 90 days after the end of its fiscal year (calendar year for sole proprietors).
- Medicare Marketing Guidelines (MMG)
What are Medicare Marketing Guidelines?
Marketing Guidelines reflect the Centers for Medicare & Medicaid Service (CMS) current interpretation of the marketing requirements and related provisions of the Medicare Advantage (MA) and Medicare Prescription Drug Plan (PDP) rules. These Guidelines are for use by Medicare Advantage organizations offering MA plans and MA prescription drug (MAPD) plans, and Prescription Drug plans (PDPs).
- Form N-PX
What is Form N-PX?
SEC Form N-PX details the proxy voting record of mutual funds and other registered management investment companies for the most recent 12-month period ending on June 30. In accordance with Section 30 of the Investment Company Act of 1940 and Sections 13 and 15(d) of the Securities Exchange Act of 1934, SEC Form N-PX must be filed with the Securities and Exchange Commission (SEC) no later than August 31 of each year.
A number of mutual funds and registered management investment companies disclose how they vote proxies relating to the portfolio securities they hold on their websites. If they do not post this information online, then shareholders can request this information and must then receive the proxy voting record within three business days, free of charge. Mutual funds share how they will provide this information in their annual or semi-annual report to shareholders.
SEC Form N-PX must contain the name of the issuer, exchange ticker symbol and Committee on Uniform Security Identification Procedures (CUSIP) number of the portfolio security; the shareholder meeting date; a short description of the matter voted on including whether it was proposed by the issuer or the security holder; whether and how the fund cast its vote on the matter as well as if it voted for or against management. The information is submitted via EDGAR (Electronic Data Gathering, Analysis and Retrieval) system and displayed publicly via the SEC’s website: sec.gov.
- Form N-Q
What is Form N-Q?
Mutual funds and other registered investment management companies must disclose their portfolio holdings on SEC Form N-Q under Section 30(b) of the Investment Company Act of 1940 and Sections 13(a) and 15(d) of the Securities Exchange Act of 1934. Funds must file the form with the Securities and Exchange Commission (SEC) within 60 days of the close of the first and third fiscal quarters of each year.
The purpose of these filings is to provide information to potential investors around whether a given index fund includes shares of a particular company or set of companies to which they might have ethical or religious objections.
The SEC may also apply the information provided on SEC Form N-Q in its regulatory, disclosure review, inspection and policymaking roles. The fund’s principal executive and financial officers must sign and certify the information provided in the form, in accordance with Section 302 of the Sarbanes-Oxley Act of 2002.
Small business investment companies are exempt from filing SEC Form N-Q, and instead must file Form N-5. SEC Form N-Q must be filed electronically via the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it is made public. It does not need to be delivered to shareholders.
- Officially Appointed Mechanism (OAM)
What is an OAM?
An Officially Appointed Mechanism (OAM) is the term used throughout Europe to describe national databases for regulated financial information. OAMs are found in each Member State of the European Union and serve as the mechanism for companies to submit their financial reports to their Regulatory Authority.
In reporting regions subject to ESMA, there is a mandate for reporting format of annual reports known as ESEF.
- Form 1-A
What is Form 1-A?
SEC Form 1-A is an offering statement required by the Securities and Exchange Commission (SEC) for the registration of certain securities that are qualified under Regulation A. This regulation was revised in 2015 to make it more useable and available for offerings up to $50 million. Also known as the Regulation A Offering Statement under the Securities Exchange Act of 1933, SEC Form 1-A is filed to disclose key information to investors as a means of preventing fraud in the sale of the securities that are offered.
Two tiers of offerings fall under Regulation A. They include Tier 1 offerings of securities up to $20 million in a 12-month period and Tier 2 offerings of securities up to $50 million in a 12-month period. Both Tier 1 and 2 issuers are required to file and qualify an offering statement on SEC Form 1-A.
Form 1-A may also be filed confidentially as Form DOS (Draft Offering Statement) similar to DRS (Draft Registration Statements). Any non-public submissions must be publicly filed, or disseminated, no later than 21 calendar days before qualification of the offering statement.
The offering statement is made up of three parts and must be prepared by all entities seeking exemption under Regulation A. Part 1 of SEC Form 1-A must be delivered in XML (eXtensible Markup Language) format. Parts II and III must be provided in standard EDGAR (Electronic Data Gathering, Analysis and Retrieval) format (HTML or ASCII) that adheres to SEC EDGAR filing guidelines.
- Form 144
What is Form 144?
Form 144 is a notice of intent to sell form that must be filed with the Securities and Exchange Commission (SEC) when a person who was granted shares plans to sell their unregistered shares. Form 144 must be filed with the SEC at the time the sell order is placed with the broker if the seller is an affiliate and intends to sell more than 5,000 shares or securities with a value in excess of $50,000. Securities include common stock, preferred stock and debt securities, which includes asset-backed securities and nonparticipating preferred stock. The form, pursuant to Rule 144 in The Securities Act of 1933, is a required filing and the sale must occur within 90 days after the filing.
Rule 144 has a number of conditions for the sale of unregistered shares including:
Minimum holding period: restricted securities must have been held by SEC-reporting companies for at least six months and at least one year for non-reporting companies
Quantity restrictions: the sale must not represent more than 1% of outstanding shares
Disclosure: adequate public information about the issuer must be made available
Filing: a brokerage firm or stockbroker must handle the transaction
Filing: the filing must be done electronically through the EDGAR system
If 90 days pass without a sale, a new SEC Form 144 must be filed.
- Form 1-K
What is Form 1-K?
Form 1-K must be filed on an annual basis with the Securities and Exchange Commission (SEC) by issuers that have completed a Tier 2 offering under Regulation A. Tier 2 comprises offerings of securities up to $50 million in a 12-month period.
This annual report, which must be filed within 120 calendar days after the end of the fiscal year covered by the report, includes two parts. Part I of Form 1-K is delivered in XML (eXtensible Markup Language) format and contains basic information on the issuer along with its Regulation A offerings.
Meanwhile, Part II of Form 1-K is where the issuer must disclose information on its business, directors, officers and security-holders. Disclosures must also include information on related party transactions and interest of management and others in certain transactions. The issuer must also share audited financial statements for the two most recently completed fiscal years as well as analysis of financial condition and results of operations.
Form 1-K must be filed with the SEC electronically by means of the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it’s then displayed publicly on SEC.gov.
- Form 1-Z
What is SEC Form 1-Z?
SEC Form 1-Z must be filed with the Securities and Exchange Commission (SEC) by issuers that have qualified an offering under Regulation A. This exit report must include certain types of information based on the tier of offerings.
Tier 1 issuers—comprising offerings of securities up to $20 million in a 12-month period—need to file an exit report on SEC Form 1-Z within 30 calendar days after the termination or completion of its Regulation A offering. The number of securities sold; the names of underwriters and other service providers involved as well as the fees they received; and net proceeds to the issuer must all be included in the exit report.
Certain Tier 2 issuers—comprising offerings of securities up to $50 million in a 12-month period—can file SEC Form 1-Z to discontinue the filing of ongoing reports under Regulation A. The exit report must certify that the issuer has met the requirements for terminating its ongoing reporting obligations under Regulation A. Most importantly, the issuer must disclose the approximate number of holders of record of each class of securities the issuer has offered in Tier 2 offerings.
SEC Form 1-Z, which is XML-based, is filed through the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system.
- Pay Ratio Disclosure
What is Pay Ratio Disclosure?
Pay Ratio Disclosure is a rule adopted by The Securities and Exchange Commission that requires a public company to disclose the CEO’s compensation in comparison to the median pay of its employees. This rule helps companies keep flexibility in calculating this pay ratio and is used as a tool to inform shareholders when voting on “say on pay”.
As of 2017, companies are required to provide Pay Ratio information through their registration statements, proxy and information statement, and their annual report that calls for executive compensation information. It is required that these companies provide disclosure of their pay ratio information for their first fiscal year.
For support with Pay Ratio Disclosure and more, explore our Annual Meeting and Proxy solutions.
- PCAOB (Public Company Accounting Oversight Board)
What is PCAOB?
The Public Company Accounting Oversight Board (PCAOB) was founded and established in 2002 as a result of the Sarbanes-Oxley (SOX) Act. The PCAOB is a non-profit organization that monitors auditors of public companies in efforts to minimize audit risks. They strive to set standards to improve the reliability of audits. Two Advisory Groups were also formed under the PCAOB; those being the Standing Advisory Group and the Investor Advisory Group.
- Periodic and Interim Reporting
What is Periodic & Interim Reporting?
Periodic and interim reporting is the practice of providing company performance reports for periods shorter than a fiscal year, such as monthly, quarterly or semi-annual reports. Known as periodic reports, interim reports or interim statements, these updates provide important company information between annual reporting periods.
To help protect investors and keep the public informed, regulations typically require public companies to submit company performance reports more than once a year. Although interim reports are not usually audited, companies must review them to ensure accuracy and distribute them in a timely manner.
Publicly held companies in the US are usually subject to interim reporting requirements, including filing quarterly reports with Form 10-Q in addition to annual reports with Form 10-K. Quarterly reports usually include a balance sheet, income statement and statement of cash flows.
When public companies in the US make important announcements such as an executive leadership change or bankruptcy, they may also be required to file a current report with Form 8-K. Foreign companies operating in the US may be required to report corporate news and press releases with Form 6-K.
- Pipe Transactions
What is a PIPE Transaction?
A PIPE (Private Investment in Public Equity) Transaction is the practice of offering large amounts of stock of a publicly traded company to private investors at a preferred price. PIPE transactions have grown in use by SPACs to generate additional capital to be used to close a merger transaction with a target company. Why are PIPE transactions appealing? PIPE transactions are a way for companies to raise capital quickly. As with a Follow-on Offering, adding stock to the market can dilute stock value and impact shareholder value.
- Preliminary Proxy Statement, PRE 14A
What is a Preliminary Proxy Statement (PRE 14A)?
The preliminary proxy statement, also known as the PRE 14A, is a form required by the Securities and Exchange Commission (SEC) when there is a request of shareholder votes on items unrelated to an acquisition or a contested matter.
For support with Preliminary Proxy Statement, PRE 14A and more, explore our Annual Meeting and Proxy solutions.
- Proxy Agreement
What is a Proxy Agreement?
A proxy agreement is an agreement that grants authority for an individual to do legal tasks for another individual. An example of this would be when a shareholder assigns permission to a person to vote on their behalf. To grant permission, the shareholder would need to complete a Proxy Form to authorize and designate this person to vote on their behalf.
For support with Proxy Agreement and more, explore our Annual Meeting and Proxy solutions.
- Proxy Season
What is Proxy Season?
Proxy Season is the time between mid-April to mid-June where most large publicly traded companies host their annual meeting where the shareholders go over the company’s financial performance and then vote on issues stated on the Proxy Voting Card.
For support during Proxy Season and more, explore our Annual Meeting and Proxy solutions.
- Proxy Solicitor
What is a Proxy Solicitor?
A Proxy Solicitor is a specialist a firm hired to help issuers gather proxy votes. Issuers hire solicitors as an insurance policy to help drive shareholder voting for non-discretionary (non-routine) proposals, NYSE regulatory changes regarding equity plans, and majority voting on director elections. Proxy Solicitors utilize shareholder lists to proactively contact shareholders to explain proposals and encourage voting. Ultimately, the solicitor’s job is to increase the shareholder vote.
For support with your shareholder communications and more, explore our Annual Meeting and Proxy solutions.
- Proxy Statement
What is a Proxy Statement?
A Proxy Statement is a document filed with the Securities and Exchange Commission (SEC), required to be filed on SEC Form DEF 14-A. It contains information needed to enable the shareholders to vote in an informed manner on matters intended to be acted upon at the Annual Meeting of Shareholders. It is typically filed on or before the date the statement is mailed to shareholders.
For support with your proxy summary and more, explore our Annual Meeting and Proxy solutions.
- Proxy Summary
What is a Proxy Summary?
A Proxy Summary is an added feature to a company's proxy statement. It is the most common feature of upgraded proxy statements. It is a three-to-five-page summary that focuses on key voting issues, corporate governance, compensation, and business results. A company can use infographics to draw the reader’s attention to key points and makes the summary visually appealing.
For support with your proxy summary and more, explore our Annual Meeting and Proxy solutions.
- Proxy Voting Card
What is a Proxy Voting Card?
A Proxy Voting Card is a form, that is sometimes sent out with the company's Proxy Statement, used to collect shareholder's votes on the issues shared within the statement. The shareholder can vote for or against a matter being presented. It is the voting instrument that allows registered shareholders to vote their shares whether or not they plan on attending the annual meeting. The proxy card is furnished and filed along with the proxy statement and is processed and printed by the company’s Transfer Agent or alternative service provider.
For support with your Proxy Voting Card and more, explore our Annual Meeting and Proxy solutions.
- Ratification of Auditors
What is a Ratification of Auditors?
Ratification of Auditors is a proposal to ratify the appointment of an independent registered public accounting firm that is mandatory in every proxy statement.
For support with Ratification of Auditors and more, explore our Annual Meeting and Proxy solutions.
- Registered Shareholder
What is a Registered Shareholder?
A Registered Shareholder or registered owner is a person who directly owns stock (in certificate form) for a company. The Registered Shareholder will have their name and address filed on the company’s registry even if the shares were purchased by a broker.
Explore our Annual Meeting and Proxy solutions.
- Registration Forms
What are Registration Forms?
Registration forms are documents notifying the SEC of the issuer’s intent to operate as an investment company, in accordance with US regulations.
The first document that must be filed with the SEC is a notification of registration on Form N-8A, followed within three months by a registration statement on the appropriate SEC form for the type of investment or securities company the issuer is registering. Registration forms that the issuer may submit include Form N-1A for mutual funds; Form N-2 for closed-end funds; Form N-3 for separate accounts offering variable annuity contracts with management investment companies; Form N-4 for separate accounts offering variable annuity contracts with unit investment trusts (UITs); and Form N-6 for separate accounts offering variable life insurance policies with UITs.
- Regulation A
What is Regulation A?
Regulation A, also known as Reg A, allows companies to offer and sell securities to the public without having to register the securities with the Securities and Exchange Commission (SEC). The regulation exempts small- to medium-sized companies from registration requirements in order to make it easier to raise capital under two different tiers. These two tiers went into effect when the SEC adopted final rules in March 2015 to implement Section 401 of the Jumpstart Our Business Startups (JOBS) Act. Reg A also allows companies to publicly promote themselves as a means of attracting investors.
Under Tier 1 of Regulation A, a company can offer up to $20 million in any 12-month period. Requirements include filing Form 1-A—similar to a prospectus—that’s subject to review and qualification by the SEC along with the securities regulator in the states where the offering is taking place. The offering circular is the narrative portion of SEC Form 1-A and is shared with potential investors.
Under Tier 2 of Regulation A, a company can raise up to $50 million in any 12-month period. Issuers in this case must provide an offering statement to qualify their offerings with the SEC but do not have to register or qualify their offerings with state securities regulators. With both Tier 1 and Tier 2, the offering circular must contain critical information such as details about the offering and the securities offered; investment risks; any selling shareholders; specifics on the company’s business, management, performance and plans; and financial statements—with Tier 2 companies, financial statements must be audited.
Companies issuing under Tier 2 must also file regular reports with the SEC, though they are exempt from having to file quarterly reports. Semiannual (Form 1-SA) and annual reports (Form 1-K) along with interim current reports (Form 1-U) are required of these Tier 2 companies under Regulation A.
In some cases, a Tier 2 company may apply to be listed on a national exchange. If it meets the requirements for that exchange, the company will then need to file more extensively, including submitting quarterly reports on a regular basis.
- Regulation C
What is Regulation C?
Regulation C implements the Home Mortgage Disclosure Act (HMDA) of 1975. It’s intended to provide the public with information on whether lending institutions—such as banks, savings associations, credit unions and other mortgage-lending institutions—are serving prospective buyers with the housing credit needed in the communities where the institutions are located.
HMDA and Regulation C came about in response to public concern over credit shortages in—and the subsequent decline of—certain geographic areas. The regulation is also intended to help public officials appropriately distribute public investments from the private sector to areas where funding is needed. And it’s also aimed at helping identify discriminatory lending activities.
Institutions providing mortgages that are government-backed must file disclosure reports on an annual basis that include the quantity and dollar amounts of all mortgages provided. Lending institutions with total assets that fall below $10 million are exempt from Regulation C.
- Regulation CE
What is Regulation CE?
Regulation CE makes certain issues of securities exempt from registration requirements mandated by the Securities Act of 1933—as long as the issuers satisfy the conditions of paragraph (n) of Sec. 25102 of the California Corporations Code. Section 25102(n) exempts offerings to qualified purchasers and includes a “test the waters” provision that allows issuers to publish and share a general announcement of the proposed offering in writing both to qualified and non-qualified investors.
Adopted by the Securities and Exchange Commission (SEC) in 1996, Regulation CE, which provides a coordinated federal-state exemption, is intended to ease the regulatory hardships experienced by small businesses issuing securities, thereby making it easier for them to raise funds. These small businesses comprise California corporations, other business entities organized under California law and other corporations with substantial California ties. The federal-state exemption defers to the California state exemption, which allows California authorities to determine the scope of the exemption.
That said, Regulation CE does impose two federal requirements, the first of which limits offerings to $5 million. The second only allows “restricted securities” in a Regulation CE transaction—meaning, securities can only be resold if the resale is registered with the SEC or the resale is made exempt from this requirement.
The issuer must provide a written disclosure to the purchaser at least five days before the securities are sold or a commitment to purchase is accepted from the purchaser. The disclosure statement must meet the requirements of Regulation D of the Securities Act. It must also include information as required by the California Commissioner of Corporations.
- Regulation D
What is Regulation D?
Regulation D, also known as Reg Dex or Reg D, comprises three rules—rules 504, 505 and 506—that provide exemptions from registration requirements with the Securities and Exchange Commission (SEC) for certain companies offering and selling securities. These companies are smaller in size and often can’t bear the financial burden of a typical SEC registration. The intent is to expedite the process of raising capital for small companies.
Rule 504 of Regulation D provides exemptions for certain companies offering and selling up to $1 million of their securities in any 12-month period. Under Rule 505, qualifying companies can only offer and sell up to $5 million of its securities in any 12-month period; they must provide financial statements and may sell to an unlimited number of accredited investors as well as up to 35 other individuals; they cannot solicit or advertise to sell their securities; and purchasers may only receive restricted securities.
Meanwhile, Rule 506 of Reg D is a “safe harbor” for the private offering exemption of Section 4(a)(2) of the Securities Act. Companies offering under Rule 506 can raise unlimited capital as long as they do not solicit or advertise to sell their securities; provide financial statements to and answer all questions from prospective buyers. These companies can sell to an unlimited number of accredited investors and up to 35 other purchasers who have the necessary sophistication to evaluate the merits and risks of the prospective investment. Rule 506 of Reg D is the most common choice for filers.
Companies offering under Regulation D must file a Form D in XML format via the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system.
- Regulation E
What is Regulation E?
Regulation E exempts the securities issued by small business investment companies (SBICs) and investment companies acting as business development companies (BDCs) from having to be registered under the Securities Act of 1933. The exemption stands as long as certain conditions are met including keeping the aggregate offering price of all securities that might be sold by an issuer within a 12-month period below $5 million.
Originally adopted in 1958, Regulation E was made available to SBICs, registered under the Investment Company Act of 1940, in accordance with Section 3(c) of the Securities Act. In 1984, Section 3(b) allowed for the eligibility of BDCs for this exemption by permitting the Securities and Exchange Commission (SEC) to include any class of securities to the securities exempted from the Securities Act by Section 3.
Rule 604 of Regulation E states that companies who want to gain this particular exemption have to declare their interest to the SEC by filing Form 1-E. Meanwhile, Rule 605 calls for these companies to furnish an offering circular to entities solicited by the issuer as well as file the offering circular with the SEC if the offering exceeds $100,000.
Regulation E was intended to ease the reporting burden on small business entities. As such, filing Form 1-E on a limited offering with the SEC is less costly and time-consuming than filing a registration statement under the Securities Act. The form includes a range of information, from names and addresses of the issuer, its affiliates, directors, officers and counsel to information on whether the issuer is offering or thinking about offering any other securities.
Form 1-E, which must also include the offering circular, must be filed electronically via the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where the information is then made available to investors and the financial market in general.
- Regulation Fair Disclosure
What is Regulation Fair Disclosure (FD)?
Regulation Fair Disclosure, also known as Regulation FD or Reg FD, requires that all publicly traded companies disclose material information to all investors simultaneously. Intended to quash selective disclosure where typically large institutional investors would receive key market information before other smaller, individual investors, Regulation FD makes communication between companies and investors more transparent, frequent and timely.
The Securities and Exchange Commission (SEC) proposed Reg FD in December 1999 due to individual investor demand for even more access to material information. This demand was a result of increasing access and usage of the Internet and the rise of online discount brokers—both of which enabled individual investors to research and trade stocks on their own. Despite protests from large institutional investors, the SEC enacted Regulation FD in October 2000.
The majority of financial information is disclosed in press releases, conference calls, webcasts and via company websites. In April 2013, the SEC announced that companies could also employ social media to share information as long as certain requirements around notifying investors and ensuring unrestricted access were met.
- Regulation S-K
What is Regulation S-K?
Mandated by the Securities Act of 1933, Regulation S-K dictates the reporting requirements for various Securities and Exchange Commission (SEC) filings used by public companies. Regulation S-K applies to SEC Form S-1, which is the registration statement companies file with the SEC during their IPO. It also applies to the ongoing reporting requirements in documents such as Forms 10-K and 8-K.
Regulation S-K also applies to annual or other reports, going-private transaction statements, tender offers, proxy statements, and any other required filings under the Securities Exchange Act of 1934. Regulation S-K works in concert with other rules and regulations that companies must comply with when filing with the SEC.
- Regulation S-X
What is Regulation S-X?
Regulation S-X governs the format and content of financial statements filed with the Securities and Exchange Commission (SEC) by publicly traded securities. These financial statements are prepared according to US GAAP and filed as part of registration statements mandated by the Securities Act of 1933; registration statements under section 12; annual or other reports; under section 13 and 15(d), and proxy and information statements outlined in section 14 of the Securities Exchange Act of 1934.
Closely related to Regulation S-K, Regulation S-X is broad-reaching in that it also encompasses all notes to financial statements and all related schedules. Publicly reporting companies must accurately disclose monies and other financial data, employing consistent terminology, in order to be compliant with Regulation S-X and the Sarbanes-Oxley Act.
Rule 1-02 of Regulation S-X also addresses accountants and auditors, requiring that they be registered and in good standing “under the laws of the place of his residence of principal office.” It further mandates that an accountant retain all records of an audit or review—including correspondence and ancillary documents—of an issuer’s financial statements for a period of seven years.
Regulation S-X was developed with input from the House Committee on Financial Services, Financial Accounting Standards with FASB Accounting Pronouncements, Federal Accounting Standards Advisory Board, Public Company Accounting Oversight Board, American Institute of Certified Public Accountants and International Accounting Standards Board.
Financial statements are often included in annual reports to company shareholders. The SEC also requires financial statements be created and submitted in XBRL (Extensible Business Reporting Language).
- Regulation S-T
What is Regulation S-T?
Regulation S-T outlines rules and procedures pertaining to the Securities and Exchange Commission’s (SEC) Electronic Data Gathering, Analysis and Retrieval (EDGAR) system, by which domestic registrants, foreign private issuers and foreign governments must submit reports, schedules, forms and other filings electronically to the SEC. This includes registration statements under the Securities Act of 1933 as well as registration statements, reports and other disclosures under the Securities Exchange Act of 1934.
The intent of Regulation S-T is to drive the use of the SEC’s EDGAR system as a means of receiving, storing, processing and sharing information more effectively and efficiently. Regulation S-T isn’t intended to replace current paper rules, but acts as a supplement.
Small entities may be exempt from filing electronically if they can prove it is a temporary or continuing hardship. Filers that gain an exemption from submitting key information electronically—under Rule 202 of Regulation S-T—must file on paper based on the existing provisions laid out by the SEC.
- Rule 144
What is Rule 144?
Rule 144 regulates the resale of restricted securities. The SEC outlines 5 conditions that need to be met in order for restricted securities to be resold. Another aspect of Rule 144 requirement by the SEC is that it regulates majority shareholders and their transactions of securities. The SEC does not allow any resales of restricted securities unless they are first notified of the sale and the holder is exempt from the registration process.
For support with Rule 144 and more, explore our Capital Markets Transactions solutions.
- Rule 144A
What is Rule 144A?
Rule 144A of the Securities Act of 1933 provides a “safe harbor” from certain restrictions normally imposed to protect public investors. It can be applied when reselling private securities to qualified institutional buyers (QIBs)-that is, buyers that are considered financially sophisticated and are legally recognized by securities market regulators as needing less protection.
Rule 144A enables QIBs to more readily trade securities among themselves. It allows them to sidestep the two-year holding period requirement for privately placed securities and allows firms registered with the US Securities and Exchange Commission (SEC), as well as foreign companies providing information to the SEC, to avoid providing financial statements to buyers. However, purchasers are entitled to receive reasonably current information about the issuer upon request.
Rule 144A is a safe harbor widely invoked by non-US companies seeking access to US capital markets, though the securities sold by a foreign private issuer must not be of the same class as a class listed in the United States.
- Rule 30-e3
What is Rule 30e-3?
This rule was adopted by the SEC to allow certain registered investment companies the option of making their reports to shareholders available online instead of delivering the full report. The rule accommodates the preferences of all investors regarding their preferred means of communication—whether they wish to receive reports in paper or electronically, or simply to be notified that the reports are available online. Rule 30e-3 outlines that if certain standards are met, it is considered that the investment company has fulfilled their delivery of a report to a shareholder. These requirements include:
Reports need to be easily accessible
Quarterly holdings need to be listed
Advance notice of the availability of the report is provided
Paper copies of the report can be requested
Shareholders need to opt-in to receive the reports
For support with meeting rule 30e-3, look to our Investment Management Compliance & Marketing solutions.
- Rule 498A
What is Rule 498A?
The SEC adopted Rule 498A with the intention to modernize disclosure requirements and allow investors to make informed decisions about variable annuity and variable life insurance contracts. Rule 498A provides regulations related to the access to more detailed information available online, with the ability to request additional materials either electronically or in paper format.
For support with meeting rule 498A, look to our Investment Management Compliance & Marketing solutions.
- Sarbanes-Oxley Act
What is the Sarbanes-Oxley Act (SOX)?
The Sarbanes-Oxley Act of 2002, also known as Sarbanes-Oxley, Sarbox or SOX, was passed by Congress to require public companies and their top management to fully disclose their financial and accounting practices and activities. Sarbanes-Oxley, which comprises 11 sections, also contains provisions that address privately held companies.
Major corporate and accounting scandals that shook investor confidence—such as those surrounding Enron and Worldcom— were the impetus for Sarbanes-Oxley. Sponsored by Senator Paul Sarbanes and Representative Michael G. Oxley, SOX requires that senior management certify the accuracy of their company’s financial statement. It also exacts harsh penalties for fraudulent financial activity and increases oversight by the company board of directors. And it ensures the independence of outside auditors reviewing corporate financial statements.
In addition, the Sarbanes-Oxley Act requires the Securities and Exchange Commission (SEC) to publish rules and regulations as well as deadlines for compliance by public corporations. Since SOX’s passing, the SEC has set up numerous rules to administer Sarbanes-Oxley. It also created the Public Company Accounting Oversight Board to oversee, inspect and govern accounting firms acting as auditors of the internal control practices of public companies.
Smaller companies with a market cap of less than $75 million are exempt from SOX requirements, according to the Dodd-Frank Act. Meanwhile, countries such as Canada, Germany, France, Australia and Japan have since adopted stricter financial governance laws similar to the major elements set forth in the Sarbanes-Oxley Act.
- SASB (Sustainability Accounting Standards Board)
What is SASB?
Founded in 2011, the Sustainability Accounting Standards Board (SASB) is a non-profit organization located in California. SASB was established with a goal to create standards for companies to disclose and report financial sustainability information.
- Say on Pay
What is Say on Pay or Say on Pay Vote?
Say on Pay is the term used for the shareholder's vote on approving top executive's compensation packages. The votes are only required to be advisory, but each company must disclose in the Compensation Discussion and Analysis (CD&A) how its compensation policies have taken into account the results of the most recent say-on-pay vote. The SEC also requires the formation of Compensation Committees to monitor and report on compensation issues.
For support with Say on Pay and more, explore our Annual Meeting and Proxy solutions.
- Schedule 13D
What is Schedule 13D?
Schedule 13D must be filed with the Securities and Exchange Commission (SEC) when an entity acquires more than 5% of any class of publicly traded securities in a public company. In accordance to Rule 13D, this particular SEC filing of an initial beneficial ownership must be submitted within 10 days of the transaction.
Schedule 13D is intended to increase transparency around who the large shareholders are in a public company and why they have a stake in it. When a Schedule 13D is filed, it may disclose to the public that a hostile takeover, proxy battle or other “change of control” may soon take place.
Schedule 13D is made up of seven sections ranging from basic information on the security type and class, as well as the contact information for the owner, to exhibits such as letters to management signaling a hostile takeover.
Schedule 13D, which is often submitted with a tender offer, must be filed electronically via the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it is made publicly available on sec.gov.
- Schedule 13G
What is Schedule 13G?
Schedule 13G, a simpler, short-form version of Schedule 13D, can be used to disclose the beneficial ownership of a company in lieu of Schedule 13D as long as certain conditions are met by three categories of owners: a qualified institutional investor in accordance with Rule 12d-1(b), a passive investor based on Rule 13d01(c), and an exempt investor laid out in Rule 13d-1(d).
Qualified institutional investors must file Schedule 13G within 45 days of the end of the calendar year in which they acquired more than 5% of a company. If they acquired more than 10%, then they must file within 10 days of the end of the calendar month in which the acquisition was made. Qualified investors are only eligible if they acquired the securities in the ordinary course of business, without changing or intending to exert control over the issuer. And they must be a regulated entity such as a registered investment adviser or company.
Passive investors must file Schedule 13G within 10 days of a transaction that amounts to more than 5% but less than 20% ownership of a company. They are also only eligible if they do not change or influence control of the issuer.
Meanwhile, exempt investors should file Schedule 13G within 45 days of the end of the calendar year in which they acquired more than 5% of a company. One type of exempt investor is an entity that’s acquired beneficial ownership of over 5% of a class of equity securities that weren’t registered when the acquisition took place but were registered subsequently.
Schedule 13G must be filed electronically via the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it is made publicly available on sec.gov.
- SEC Effectiveness Date
What is SEC Effectiveness Date
This is referred to as the date when the SEC announces a specific Registration Statement to be effective.
- SEC Filing Agent / Printer
What is an SEC Filing Agent?
An SEC Filing Agent is an entity hired to prepare, file, print and distribute periodic and interim disclosure reports, including proxy statements. Public companies work with an SEC filing agent to produce the printed proxy statement, execute the filing to the SEC and distribute the proxy materials to shareholders.
For support with SEC Filing Agent / Printer and more, explore our Annual Meeting and Proxy solutions.
- Secondary Offering
What is a Secondary Offering?
A Secondary Offering is the sale of stock from an already publicly traded company. The most common Secondary Offering is when stockholders sell all or a portion of their holdings. In this scenario, only the ownership of the stock changes and the proceeds of the sale go to the seller of the stock. There is little impact to other stockholders or the company whose stock has been sold.
- Section 16 - Forms 3, 4, and 5
What is Section 16 (Forms 3, 4, 5)?
Section 16 of The Securities Exchange Act of 1934 requires corporate insiders to publicly disclose their company affiliations, material changes in their holdings or unreported insider transactions through various regulatory filings with the US Securities and Exchange Commission (SEC).
Specifically, Section 16 mandates that Forms 3, 4, and 5 be filed by insiders—in other words, company investors who are directly or indirectly beneficial owners of more than 10% of stock in a company or directors and officers of the issuer of the securities.
An insider of a first-time securities issuer or a new insider at an already-registered securities issuer must carry out the initial filing, Form 3. Form 4 is used to report material changes in insiders’ holdings. Form 5 reports any transactions that should have been included on a previous Form 4 or were eligible for deferred reporting such as gifts of shares or multiple small transactions.
Section 16 reporting must be submitted electronically through the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it becomes public record. The SEC also requires companies to post the forms on their websites by the end of the next business day after filing them.
Section 16 reporting deadlines were accelerated due to provisions of the Sarbanes-Oxley Act of 2002 (SOX).
- Section 508 Compliance
What is Section 508 Compliance?
As part of the US Rehabilitation Act, Section 508 outlines responsibilities for access to people with disabilities. According to Section 508 guidelines, federal agencies and their contractors are required to make public documents accessible to people with physical, sensory or cognitive disabilities. This includes companies that provide goods and services to federal agencies and contractors, including healthcare providers and software companies. Overlooking this requirement has serious consequences for companies that work with federal agencies or contractors. Health Insurance Plans that fail to include accessible documentation may be found non-compliant under US law, incurring penalties for the responsible companies. As a result, Section 508 compliance has emerged as a primary concern in preparation of PDF documentation intended for public release.
- Securities Act of 1933
What is the Securities Act of 1933?
The Securities Act of 1933, also known as the ‘33 Act or the Truth in Securities law, was the first major federal legislation passed to regulate the securities markets. It was put into place in response to the stock market crash of 1929 as a means of ensuring better transparency in financial statements to protect investors in their investment decisions as well as protect investors from fraudulent activity and deceit in the securities market.
Prior to the ‘33 Act, it was left to the states to regulate securities which lead to an inconsistent representation of securities issued and inconsistent disclosure requirements and enforcement. The ’33 Act required companies to register with the Securities and Exchange Commission (SEC) and provide all potential investors with standard documentation including prospectus including detailed and certified financial statements, information about management and business plans, and a description of the securities being offered. In order for a company to go public and have its shares traded on an Exchange, the Securities and Exchange Commission must declare the company submission “effective”.
In addition to setting oversight at the federal versus state level, the ’33 Act set out uniform rules and disclosure requirements for public company reporting to help protect investors from fraudulent activities or misrepresentation.
The Securities Act of 1933 was signed into law by President Franklin D. Roosevelt as part of the New Deal during the Great Depression. Its genesis was the meteoric stock market rise in the 1920s and then the cataclysmic stock market crash which began on Black Thursday, October 24, 1929 when the stock market lost 11% of its value. Then came Black Monday, October 28, 1929 when the stock market fell 13% in a single day. The next day saw more hemorrhaging when the market fell another 12% and continued to fall until it lost nearly half of its value in mid-November and would take 15 years to raise to the pre-stock market crash level. The fall scared potential investors and consumers who feared for their future financial outlook and refrained from spending which further exacerbated the problem leading to further economic contractions. The United States didn’t fully emerge from the Stock Market Crash of 1929 and the ensuing Great Depression until World War 2 which required men and machinery to fuel the effort.
The Stock Market Crash that permeated America for more than a decade was attributed to a speculative boom that went uncontested. With the ’33 Act, capital markets regulation was in the hands of the United States Federal government. Standards including the creation and submission of registration statements that include a prospectus containing detailed financial information on the securities offered, company and business. All those signing the registration statement, including the company’s senior management and underwriter, must conduct thorough due diligence to verify that the document is complete and accurate.
Registration statements and their accompanying prospectuses must be filed via the Security and Exchange Commission’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where it is made publicly available on sec.gov. These registration statements are examined by the Securities and Exchange Commission to ensure that they are compliant with disclosure requirements and that the American public and investors can make informed decisions about their investment decisions.
- Securities Act of 1940
What is The Securities Act of 1940?
The Securities Act of 1940 is a law passed by Congress and administered by the Securities and Exchange Commission (SEC) to regulate and prevent fraudulent conduct by money managers, investment consultants and financial planners. These various investment advisers are required to operate against a code of conduct set forth under the Act to ensure that all conflicts of interest between them and their clients are eliminated. The Act subjects advisers to five kinds of requirements: fiduciary duties to clients; substantive prohibitions and requirements; contractual requirements; record-keeping requirements; and oversight and inspection by the SEC.
Amendments to the Act require investment advisers with more than $25 million under management to register with the SEC. The Act also delineates investment advisers’ liability while giving structure around what fees and commissions advisers can collect from their clients.
The Wall Street crash of 1929, which precipitated the Great Depression, was the impetus for the creation of the Securities Act of 1940. More specifically, the SEC published a report on investment trusts and investment companies in 1935 that warned against giving certain investment advisers free reign. The report recommended they be monitored and regulated to guard against the dispensing of advice that favors—whether consciously or not—the advisers’ own financial interests.
Investment advisers must file Form ADV electronically with the SEC via IARD (the Investment Adviser Registration Depository) and state securities authorities on an annual basis. On Part 1 of this form, investments advisers are required to include their educational background, experience, exact type of business they’re engaged in, assets, information on clients, history of a legal and/or criminal nature, and type of investment advice they offer. Part 2 of Form ADV comprises the narrative brochure that advisers must share with their clients. When filed, Form ADV is made available to the public on the SEC’s Investment Adviser Public Disclosure website.
- Securities Exchange Act of 1934
What is the Securities Exchange Act of 1934?
The Securities Exchange Act of 1934 created the Securities and Exchange Commission (SEC) and authorized it to govern the secondary market trading of company securities in the US. Secondary trading is the buying or selling of company securities (stock) typically through brokers or dealers. Often shortened to the Exchange Act of 1934 or the ‘34 Act, this landmark legislation laid the foundation for the financial regulation of public companies listed on stock markets including the New York Stock Exchange, American Stock Exchange and Pacific Stock Exchange.
President Franklin D. Roosevelt first signed the Securities Act of 1933 and the subsequent Securities Exchange Act of 1934 into law in the aftermath of the 1929 stock market crash. The Exchange Act of 1934 gives the SEC broad powers to enforce US federal securities law, but also investigate potential violations such as insider trading, the sale of unregistered stocks, manipulation of market prices and disclosure of fraudulent financial information. The SEC’s consumer protection powers extend to the organizations and individuals participating in the securities markets which would include securities exchanges, brokers and dealers, investment advisors and investment funds. By law and with SEC oversight, consumers and investors have access to public company registration statements, periodic reports among other securities forms through it’s Electronic Data Gathering Analysis and Retrieval database (EDGAR).
If a company has more than 500 shareholders and more than $10 million in assets, The Exchange Act of 1934 Act requires that it file annual company information with the SEC using Form 10-K as well as quarterly with Form 10-Q. If a company experiences a material event such as a change in leadership or structure, the SEC mandates the filing of Form 8-K to disclose these changes. Forms 10-K, 10-Q, and 8-K must be filed via the SEC’s EDGAR (Electronic Data Gathering, Analysis and Retrieval) system, where they are made publicly available on sec.gov. These periodic reports and annual statements are examined by the SEC to ensure that they are compliant with disclosure requirements and that the American public and investors can make informed decisions about their investment decisions.
The Exchange Act of 1934 also sets forth disclosure requirements in materials used to solicit shareholder votes in annual meetings held for approval of corporate action. The information is captured in proxy materials that must be filed with the SEC in advance of any solicitation. The SEC is charged with ensuring the company has provided all proper and accurate disclosures.
The Exchange Act of 1934 requires disclosure of important information by anyone seeking to acquire more than 5 percent of a company’s securities by direct purchase or tender offer as such an offer could impact control of the public company.
The SEC is limited to seeking civil penalties such as fines and injunctions (barring a person from future roles such as a corporate officer). Depending on the severity or significance of the offense, the Department of Justice can file criminal charges for alleged violations of The Exchange Act of 1934.
The largest SEC fine to date was levied on JP Morgan Chase for the selling of mortgage securities by illegal means, leading to the 2012 financial crisis.
- Securities Investor Protection Act of 1970
What is the Securities Investor Protection Act of 1970?
The Securities Investors Protection Act of 1970 amended the Securities Exchange Act of 1934 and authorized the creation of the Securities Investor Protection Corporation (SIPC). Sponsored by the US government, the SIPC is a non-profit, independent corporation that requires the membership of most registered brokers and dealers under the 1934 Act.
Enacted in 1970, the Securities Investors Protection Act, or SIPA, was intended to build public confidence in securities markets by covering customers for any broker-responsible losses or failures. As such, the SIPC maintains funds which are intended to protect investors against brokers who misappropriate their funds as well as pay them in the event that their broker or dealer goes bankrupt. The SIPC funds are made possible as a result of assessments paid to the SIPC by members based on the gross business they generate from the sale of securities.
The SIPC insures investors for up to $500,000 with cash claims limited to $250,000. This insurance program does not protect against losses due to market conditions. However, when a brokerage firm fails, the SIPC facilitates the transfer of accounts from the failed brokerage to a different member brokerage firm. If the transfer doesn’t go through, then the SIPC pays the investors for the market value of the lost shares or certificates for the stock, and the failed brokerage firm is liquidated.
- Securities Offering
What Is a Securities Offering?
To raise funds for expansion, businesses often opt to raise capital through a securities offering. Many small companies offer equity in the form of common stock, while more established companies may also offer bonds representing their debt obligations. To offer equity or debt securities in the US, companies must either be registered with the SEC or exempt from registration in accordance with the federal Securities Act and state securities laws.
Equity securities grant partial ownership interest to the purchaser, or stockholder. For equity offerings, a company files articles of incorporation specifying the amount and type of stock it plans to issue. To protect investors, state and federal regulations also require companies to disclose specific information to stockholders.
Unless specifically exempt under the Securities Act, companies are required to file a registration statement with the SEC providing key information about the company, its securities and the offering. Once the SEC declares the registration statement effective, the company is allowed to make its initial public offering (IPO). When a company registers an offering with the SEC, it officially becomes a public company.
Registration statements have two parts. The first is the prospectus, which is the legal offering made by a company issuing securities. The prospectus covers key facts about the issuer's business operations, risks, daily operations and management in addition to audited financial statements. The issuer must deliver a prospectus to everyone who buys or offers to buy its securities. The second part of the registration statement includes confidential company information the issuer is not obliged to provide to investors, but must file with the SEC.
Companies typically use the SEC Form S-1 to prepare the registration statement for a securities offering. Rules for regulation statement disclosures are outlined in Regulation S-K, and financial statements must be prepared for registration statements in compliance with Regulation S-X. Completed registration statements are filed using the SEC’s Electronic Data Gathering, Analysis and Retrieval (EDGAR) system.
What is SEDAR?
The System for Electronic Document Analysis and Retrieval (SEDAR) is Canada's electronic filing system for disclosures by public companies and investment funds. This system allows regulated company and securities information to be consistently collected, shared and filed with the 13 provincial and territorial securities regulatory authorities (the Canadian Securities Administrators, or CSA) in the SEDAR filing system.
Public company and investment fund profiles are available to investors and others on the SEDAR website: www.sedar.com. Online SEDAR profiles include information that most public companies, investment funds and investment fund groups are required to make public in Canada, including addresses, contact information and stock exchange listing.
However, not all SEDAR filings are automatically made public. Some documents filed only with Canadian exchanges are not publicly available. When a prospectus is filed through SEDAR, it’s reviewed by securities regulatory authorities who then make the appropriate documents available via the SEDAR Data Distribution Service.
Some documents don’t require review and are immediately distributed via the SEDAR Data Distribution Service—particularly continuous disclosure documents such as annual reports, financial statements and news releases. No matter whether SEDAR filings are scrutinized by investors or Canadian regulators first, they must be exact, accurate and on time.
- SOX Section 302
What is SOX Section 302?
Section 302 of the Sarbanes-Oxley (SOX) Act is effective with the first ’34 Act (Exhibit 31 of your 10-K or 10-Q) and requires personal statements from the Principal Executive and Financial Officers of the company. These statements include information such as the financial statements have been reviewed and are correct, the signee and additional employees involved are responsible for disclosure of all information necessary, and not aware of any fraud.
For support with Section 302 filing and more, explore our Capital Markets Transactions solutions.
- SOX Section 409
What is SOX Section 409?
Section 409 of the Sarbanes-Oxley (SOX) Act outlines that enterprises have a responsibility to disclose to the public “Additional information concerning material changes in the financial condition or operations of the issue, in plain English.”
Real-time issue disclosures can be supported by qualitative information and graphical presentations to help the public understand the situation better. The core intent behind this section is for organizations to stay transparent for the public and investors. Information on financial conditions must be in clear terms so that it can be easily understood by the reader.
- SOX Section 906
What is SOX Section 906?
Section 906 of the Sarbanes-Oxley (SOX) Act requires a written statement from the CEO and CFO declaring that the financial report “fairly presents, in all material respects, the financial condition and results of operations of the issuer.” The section also outlines that there are criminal penalties for failing to produce a report that matches these requirements and potential prison time for those who deliberately attempt to obfuscate information.
- Summary of Benefits and Coverage (SBC)
What is Summary of Benefits and Coverage (SBC)?
A Summary of Benefits and Coverage is an easy-to-read summary that lets individuals make apples-to-apples comparisons of costs and coverage between health plans. They can compare options based on price, benefits, and other features that may be important to them. Individuals will get the “Summary of Benefits and Coverage” (SBC) when they shop for coverage on their own or through their job, renew or change coverage, or request an SBC from the health insurance company.
- Form TA-1
What is SEC Form TA-1?
Transfer agents must file SEC Form TA-1 in compliance with Section 17A of the Securities Exchange Act of 1934 to register or amend registration with one of four regulatory agencies—Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation or the Securities and Exchange Commission (SEC).
Transfer agents, which are typically banks or trusts though can sometimes comprise companies that serve as their own agents, facilitate secondary trades.
Activities involve tracking and recording changes of ownership, maintaining the issuer’s security holder records, canceling and issuing certificates, and distributing dividends.
SEC Form TA-1 must be filed with the SEC in XML format via the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system. Information supplied on the form will be made publicly available on sec.gov. Registration of a transfer agent becomes effective 30 days after receipt of the application, unless the filing doesn’t comply with applicable requirements or the SEC accelerates, denies or postpones registration.
- Form TA-2
What is SEC Form TA-2?
Transfer agents submit SEC Form TA-2 as a means of providing an annual report of transfer activities. These activities comprise transactions between issuers of securities and their holders—from recording ownership changes to distributing dividends. They submit SEC Form TA-2 to one of four regulatory agencies—Comptroller of the Currency, the Board of Governors of the Federal Reserve System, the Federal Deposit Insurance Corporation or the Securities and Exchange Commission (SEC).
SEC Form TA-2 is required based on the provisions set forth under Section 17A of the Securities Exchange Act of 1934. This form is used as a means of providing oversight of transfer agents by regulatory bodies. The SEC also conducts transfer agent inspections on a periodic basis.
Transfer agents must file SEC Form TA-2 with the SEC in XML format via the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system. These annual reports are then made publicly available on sec.gov.
- Form TA-W
What is SEC Form TA-W?
SEC Form TA-W is a notice of withdrawal from registration that transfer agents submit in compliance with Section 17A of the Securities Exchange Act of 1934. Using this form, transfer agents must supply the reasons for terminating the performance of their functions or for otherwise requesting to withdraw registration.
Additionally, SEC Form TA-W details whether the registrant intends to perform a transfer agent function in the near future; if that agent is directly or indirectly involved in any legal actions or proceedings due to their performance of transfer agent functions for a security; and if there’s a successor transfer agent who will take on the current agent’s activities.
SEC Form TA-W must be filed in XML format with the Securities and Exchange Commission (SEC) EDGAR system, where it is made publicly available on sec.gov. Upon signing the form, registrants consent to making all books and records available for examination by authorized representatives of the SEC.
- Form 13F
What is Form 13F?
Institutional investment managers having equity assets under management of $100 million or more must use SEC Form 13F—pursuant to Section 13(f) of the Securities Exchange Act of 1934—to disclose information about themselves as well as their recent investment holdings. Also known as the Information Required of Institutional Investment Managers Form, this report must be filed with the Securities and Exchange Commission (SEC) within 45 days of the end of each quarter.
An entity that invests in, or buys and sells, securities for its own account as well as a natural person or an entity that exercises investment discretion over the account of any other natural person or entity constitutes an institutional investment manager. Registered Investment Advisers (RIAs), insurance companies, pension funds, hedge funds, mutual funds, banks and trust companies are all types of institutional investment managers.
SEC Form 13F must include the issuer name of all Section 13(f) securities as well as the class of security listed, number of shares owned and the fair market value of the securities listed as of the end of the calendar quarter during which the report is filed. Section 13(f) securities may include equity securities that trade on an exchange (e.g., NYSE, AMEX, NASDAQ), shares of closed-end investment companies, shares of exchange-traded funds (ETFs) and certain convertible debt securities.
SEC Form 13F contains two parts, Form 13F and Information Table, that must be filed in XML. These filings provide key data points by which to gauge investment management exposures, performance attribution and associated risks. These filings are filed on EDGAR and subsequently made publicly available via the SEC’s website.
- Form 13H
What is SEC Form 13H?
SEC Form 13H is used by large traders to register with the Securities and Exchange Commission (SEC) in accordance with the requirements set forth in Section 13(h) of the Securities Exchange Act of 1934. This reporting form is a means by which the SEC can identify traders dealing in a sizeable amount of trading activity, collect information on as well as analyze their trading activity.
The SEC Division of Trading and Markets instituted large trader reporting with the development of trading technology that allowed for the speedy execution of a high volume of trading. A large trader is defined as a person—including a firm or individual—whose transactions in NMS (national market system) securities equal or exceed two million shares or $20 million during any calendar day, or 20 million shares or $200 million during any calendar month.
An NMS security is “any security or class of securities for which transaction reports are collected, processed and made available pursuant to an effective transaction reporting plan, or an effective national market system plan for reporting transactions in listed options.” This typically includes any security or class of securities listed on national exchanges or traded through NASDAQ.
Large traders are required to submit an initial filing on SEC Form 13H within 10 days after the Large Trader effects aggregate transactions equal to or greater than the identifying activity level. They will then receive a large trader identification number that must be shared with all US registered broker-dealers effecting transactions on their behalf. Following the initial filing, large traders must make an annual filing on SEC Form 13H-A within 45 days from the end of each calendar year. Filers must amend their annual filings on a quarterly basis on Form 13H-Q if there are any material changes.
Large traders must file Form 13H-I to make their status as a Large Trader Inactive, or file Form 13H-T in order to terminate their filing requirements.
SEC Form 13H is filed via the EDGAR (Electronic Data Gathering, Analysis and Retrieval) system. As these filings typically contain confidential information, they are not made publicly available.
- Transfer Agent
What is a Transfer Agent?
A transfer agent is a financial institution named by a corporation to maintain records of investors or registered shareholders who own certificate-form shares. If the Transfer Agent is handling the registered shareholder’s proxy material distribution, they will coordinate the distribution process for the issuer, print registered proxy cards, and mail proxy materials to registered shareholders and employee plans. Transfer Agents maintain the registered shareholder information and are generally responsible for facilitating the proxy distribution for the registered shareholder and employee plan participants. They also can not facilitate the beneficial shareholder proxy distribution.
For support with your shareholder communications and more, explore our Annual Meeting and Proxy solutions.
- Trust Indenture Act of 1939
What is the Trust Indenture Act of 1939?
The Trust Indenture Act of 1939 mandates the use of a formal written agreement, or indenture, to fully disclose the legal obligations pertaining to certain debt securities or bonds, in general including debt securities sold in transactions registered with the Securities and Exchange Commission (SEC). Both the bond issuer and the bondholder must sign the indenture.
Administered by the SEC, the Trust Indenture Act also requires the appointment of an independent trustee to act for the benefit and protect of the rights of the holders of the securities. That trustee must make key financial disclosures to securities holders on a semi-annual basis.
The Act, which supplements the Securities Act of 1933, was intended to address flaws in the trustee system specifically that trust indentures at that time didn’t require evidence of an obligor’s performance, didn’t have to adhere to any disclosure or reporting requirements, and blocked collective bondholder action. The Trust Indenture Act protects holders’ rights to sue individually. It also exempts securities—typically municipal bonds—that aren’t subject to securities registration requirements.
- Form 12b-25
What is Form 12b-25?
Also known as the Notification of Late Filing, SEC Form 12b-25 is filed with the Securities and Exchange Commission (SEC) by a company that determines it is unable to file a required periodic report when it is due without unreasonable effort or expense for SEC Form 10-K, 20-F, 11-K, N-SAR, N-CSR, 10-Q or 10-D. This filing is intended to circumvent penalties associated with the failure to file these types of required forms in a timely manner.
A company filing SEC Form 12b-25 must include information on why they are submitting a late filing as well as expectations for any significant events or changes that might set it apart from the prior year’s filing. Once Form 12b-25 is filed, a company is still considered EDGAR compliant as long as the document being filed late, is filed within 5 calendar days for a 10-Q or 10-D and 15 calendar days for all other form types, from the original due date.
A company filing SEC Form 12b-25 would file under the respective NT Submission Form Type (NT 10-K, NT 20-F, NT 11-K, NT NSAR, NT NCSR, NT 10-Q or NT 10-D).
- US GAAP Taxonomy
What is the US GAAP Taxonomy?
GAAP is an acronym for Generally Accepted Accounting Principles, the standard accounting recording and reporting procedures used to compile financial statements to meet US industry standards and regulations. The GAAP aims to ensure consistency in financial reporting so that investors can better assess financial statements for investment purposes.
Through complex guidelines, GAAP sets out rules covering the fine details of financial statements, from balance sheet classification to revenue recognition. These guidelines are codified in the GAAP Taxonomy Architecture, which serves as the basis for XBRL.
Some financial accounting inconsistencies remain, however. Although US companies follow GAAP rules, other countries apply London-based International Financial Reporting Standards (IFRS). This gap in standards affects global business practices, from accounting to stock market valuations.
Efforts are currently underway by the SEC to adopt IFRS standards and resolve conflicts and confusion in international financial reporting in cooperation with the International Accounting Standards Board (IASB).
- Virtual Annual Meeting
What is a Virtual Annual Meeting?
A Virtual Annual Meeting is an annual meeting that gives shareholders of public businesses the option to attend and participate remotely through a virtual platform. This meeting allows all verified shareholders to vote and ask questions virtually as well.
For support with virtual annual meetings and more, explore our Annual Meeting and Proxy solutions.