What is Section 16

Описание: For more information, visit: https://www.lawdepot.com/?pid=pg-BFYM... In 1934, the United States Congress passed the Securities Exchange Act, which, in addition to establishing the Securities Exchange Commission (SEC), also lays out regulations for secondary trading of bonds, stocks, and debentures by corporation directors, officers, and principal stockholders. Section 16 stipulates filing requirements with the SEC for insiders or stock owners who are holding more than 10 percent of the outstanding stock of a company. According to Section 16, significant owners and affiliated insiders must electronically file Form 3 with the SEC within 10 days of the stock purchase or affiliation date. Insiders must report all substantial changes in their holdings on Form 4. Company officers who engage in insider transactions that are not reported on Form 4 must describe such transactions on Form 5 annually.