Investor Assistance (800) 732-0330 www.investor.gov

INVESTOR BULLETIN

Insider Transactions 

and Forms 3, 4, and 5

The SEC’s Office of Investor Education and Advocacy is 

issuing this Investor Bulletin to help educate investors 

about SEC Forms 3, 4, and 5.

The federal securities laws require certain individuals 

(such as officers, directors, and those that hold more 

than 10% of any class of a company’s securities, together 

we’ll call, “insiders”) to report purchases, sales, and 

holdings of their company’s securities by filing Forms

3, 4, and 5. 

What’s a Form 3?

When a person becomes an insider (for example, when 

they are hired as an officer or director), they must file a 

Form 3 to initially disclose his or her ownership of the 

company’s securities. Form 3 must be filed within 10 

days after the person becomes an insider.

What’s a Form 4?

In most cases, when an insider executes a transaction, 

he or she must file a Form 4. With this form filing, the 

public is made aware of the insider’s various transactions 

in company securities, including the amount purchased 

or sold and the price per share. Form 4 must be filed 

within two business days following the transaction date. 

Transactions in a company’s common stock as well as 

derivative securities, such as options, warrants, and 

convertible securities, are reported on the form. Each 

transaction is coded to indicate the nature of the 

transaction.

Codes

Following is a description of some commonly used 

“transaction codes.” For more transaction codes and 

a more detailed explanation for the various codes, 

please see the General Instructions to Form 4 at

www.sec.gov/about/forms/form4data.pdf.

Transaction Code Transaction

A Grant, award, or other acquisition

of securities from the company 

(such as an option)

K Equity swaps and similar hedging

transactions

P Purchase of securities on an

exchange or from another person 

S Sale of securities on an exchange 

or to another person

D Sale or transfer of securities 

back to the company

F Payment of exercise price or tax

liability using portion of securities 

received from the company

M Exercise or conversion of 

derivative security received from 

the company (such as an option)

G Gift of securities by or to the 

insider

V A transaction voluntarily reported 

on Form 4

J Other (accompanied by a footnote describing the transaction)
What’s a Form 5?

A Form 5 is generally due to the SEC no later than 45 

days after the company’s fiscal year ends and is only 

required from an insider when at least one transaction, 

because of an exemption or failure to earlier report, 

was not reported during the year. For example, some 

transactions, such as certain purchases by an insider of 

less than $10,000 in a six-month period, don’t have to 

be reported on Form 4 when they occur but do have 

to be reported on Form 5. The Form 5 filing doesn’t 

have to disclose transactions that have been previously 

reported. When reporting transactions on Form 5, 

insiders use the same transaction codes as when 

reporting on Form 4.

What can investors do?

Before investing, investors may wish to research insider 

ownership to consider the extent of insiders’ economic 

stake in the success of the company, as reflected both 

in outright ownership and transactions (such as equity 

swaps) that may hedge the economic risk of that 

ownership. Many investors believe that reports of 

insiders’ purchases and sales of company securities can 

provide useful information as to insiders’ views of the 

performance or prospects of the company. Of course, 

insiders may sell company securities for any number 

of reasons, including for liquidity and diversification 

purposes. Forms 3, 4, and 5 are publicly available 

through the SEC’s EDGAR database at www.sec.gov/

edgar/searchedgar/webusers.htm.

Related Information

In addition to the SEC’s EDGAR database, there 

also are many third-party websites that offer 

insider ownership and transaction information. 

If you enter the words “insider reports” into most 

Internet search engines, you’ll quickly find 

websites that can provide this information. 

For more information on the reporting requirements for officers, directors, and beneficial 

owners, you can read Section 16 of the Exchange

Act at www.sec.gov/about/laws/sea34.pdf. You 

can download blank PDF versions of Form 3, 

Form 4, and Form 5 as well as the instructions to 

these forms by visiting www.sec.gov/divisions/

corpfin/forms/exchange.shtml.

We offer educational materials so that investors 

can develop an understanding of the securities 

industry and learn how to avoid costly mistakes 

and fraud. Our educational materials also provide 

tips on how investors can invest wisely. Investors 

can order our free publications by calling (800) 

732-0330, or access them on the Internet 

through the SEC’s Investor.gov website. For 

additional educational information for investors, 

see the SEC’s Investor.gov website or the Office

of Investor Education and Advocacy’s homepage

at www.sec.gov/investor.shtml.

The Office of Investor Education and Advocacy has provided this information as a service to investors. It is neither 

a legal interpretation nor a statement of SEC policy. If you 

have questions concerning the meaning or application of a 

particular law or rule, please consult with an attorney who 

specializes in securities or tax law.

SEC Pub. No. 137 (2/13)