Form 4
Also called: Form 4 filing, statement of changes in beneficial ownership, insider filing
The SEC filing that officers, directors and holders of more than 10% must make within two business days to report a change in their holdings of the company's securities.
Last verified
Who files and when
Under Section 16 of the Exchange Act, a company's directors, officers and beneficial owners of more than 10% of a registered class are insiders for reporting purposes. They file a Form 3 when they become insiders, a Form 4 within two business days of most transactions, and a Form 5 annually for certain transactions that were exempt from earlier reporting.
Transaction codes
Each line on a Form 4 carries a code. Common ones:
| Code | Meaning |
|---|---|
| P | Open-market or private purchase |
| S | Open-market or private sale |
| A | Grant or award from the company |
| M | Exercise or conversion of a derivative security |
| F | Shares withheld to pay exercise price or tax |
| G | Gift |
Table I reports non-derivative securities (common stock); Table II reports derivatives such as options and warrants. Footnotes often say whether a sale was made under a Rule 10b5-1 trading plan.
Worked example
Hypothetical: Company X's CFO has 50,000 restricted stock units vest on Monday. The company withholds 18,000 shares for tax (code F), and on Wednesday the CFO sells 10,000 shares at $4.10 (code S). Both must be reported by Friday, two business days after the Wednesday sale. The F line is a tax mechanic; the S line is a discretionary sale.
Why it matters
Form 4s are the fastest public record of what insiders do with their own shares. Purchases with personal cash (code P) are rarer than sales, which have many routine reasons such as taxes and diversification. Reading the codes keeps tax withholding from being mistaken for selling.
How to spot it
Search EDGAR by company or by the insider's name, or use the Signal8 insiders page, which aggregates Form 4 activity. Affiliates selling restricted or control stock may also file a Form 144 beforehand under Rule 144. See Form 4 transaction codes.
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