Form 25 and Form 15: Delisting vs Deregistration

The short version

Two different filings mark the end of a company's life as a listed, reporting public company, and they are often confused.

• Form 25 removes a class of securities from listing on a national securities exchange. It ends the listing. It is filed either by the exchange (involuntary delisting) or by the company (voluntary delisting).
• Form 15 certifies that the company is terminating its registration under Section 12(g) of the Exchange Act, or suspending its reporting duty under Section 15(d). It ends or suspends the reporting: no more 10-Ks, 10-Qs or 8-Ks.

A company can delist without deregistering (it keeps filing reports and trades over the counter), and the reverse is not possible while it stays listed, because exchange listing requires registration under Section 12(b). When a company goes fully dark, it typically files Form 25 first and Form 15 afterwards.

Form 25: removal from listing

Form 25 is filed under Exchange Act Rule 12d2-2. EDGAR distinguishes the filer:

Timing of a Form 25

• The delisting becomes effective 10 days after the Form 25 is filed.
• Withdrawal of the class from Section 12(b) registration becomes effective 90 days after filing, or sooner if the SEC so determines.

For a voluntary delisting, the issuer must notify the exchange in writing of its intent at least 10 days before filing Form 25, and at the same time publish a press release and post notice on its website. It also files an 8-K under Item 3.01 within four business days of deciding to delist.

The involuntary path

An involuntary delisting starts long before the Form 25. A company typically receives a deficiency notice, fails to cure within the compliance period, receives a delisting determination, and either does not appeal or loses its appeal. The exchange suspends trading and then files Form 25-NSE once the appeal process is exhausted. By the time a 25-NSE appears, the stock has often been trading over the counter for weeks or months. See Nasdaq deficiency notices for that process.

Suspension vs delisting vs halt

These three are different events:

Form 15: ending SEC reporting

Form 15 is how a company stops being an SEC reporting company. Three rules provide the main routes.

Rule 12g-4: terminating Section 12(g) registration

A class registered under Section 12(g) can be deregistered if the class is held of record by:

• fewer than 300 persons, or
• fewer than 500 persons, where the company's total assets have not exceeded $10 million on the last day of each of its three most recent fiscal years.

(Banks and bank holding companies have a higher threshold of 1,200 holders of record.) The duty to file periodic reports under Section 13(a) is suspended immediately when the Form 15 is filed, and deregistration becomes effective 90 days after filing, or sooner if the SEC so orders.

Rule 12h-3: suspending the Section 15(d) duty

A company that once sold securities in a registered offering has a separate reporting duty under Section 15(d). It can suspend that duty if the class is held of record by fewer than 300 persons (or fewer than 500 with the $10 million asset test) and it has filed all required reports for the shorter of the most recent three fiscal years or its reporting history. The suspension is not available for a fiscal year in which a registration statement became effective or was updated, which is why companies with active shelf registrations often cannot use it until the following year.

Rule 12h-6: foreign private issuers

Foreign private issuers have a separate route based on US trading volume relative to worldwide volume, or on the number of US holders.

Holders of record vs beneficial owners

"Held of record" counts the names on the company's share register. Shares held through brokers are mostly registered in the name of a single nominee, Cede & Co. (the DTC nominee), which counts as one holder of record. A company with a large number of beneficial owners can therefore have fewer than 300 holders of record and qualify to deregister. This is why companies with active trading sometimes go dark.

What happens to the shares

Neither filing cancels the shares. After a Form 25 and Form 15, the shares typically still exist and may trade over the counter, but the company no longer files 10-Ks, 10-Qs or 8-Ks with the SEC. Some companies provide information voluntarily through OTC Markets; others provide nothing. The absence of new SEC filings after a Form 15 reflects the end of the reporting duty, not a quiet period in the business.

How to check a company on Signal8

• The delisting screener tracks companies with exchange deficiency notices, the usual precursor to an involuntary Form 25.
• Form 25, 25-NSE and Form 15 filings appear in the live SEC filings feed.
• A company's filing history is on its Filings tab, for example AAPL's filings.

FAQ

What is the difference between Form 25 and Form 15?

Form 25 removes a class of securities from listing on a national securities exchange; it ends the listing. Form 15 terminates registration under Section 12(g) or suspends the reporting duty under Section 15(d); it ends SEC reporting. A company can delist and keep reporting, trading over the counter, but it cannot stop reporting while it remains exchange-listed.

When does a Form 25 delisting take effect?

Ten days after the Form 25 is filed. Withdrawal of the class from registration under Section 12(b) follows 90 days after filing, or earlier if the SEC determines. For a voluntary delisting, the company must also give the exchange written notice at least 10 days before filing and announce it publicly at the same time.

What does Form 25-NSE mean?

It is a Form 25 filed by a national securities exchange rather than by the company. Exchanges file it when a company has failed listing standards and exhausted its appeals, and also when a security is retired, for example when a merger closes and the target's shares cease to exist. The reason matters, so check what led to the filing.

Can a company with many shareholders stop filing with the SEC?

Yes, if it has fewer than 300 holders of record, or fewer than 500 with total assets of $10 million or less in each of the last three fiscal years. Because most brokerage-held shares are registered under one nominee name, a company with a large base of beneficial owners can still meet the holders-of-record test.