Form 5

Form 5 is the annual statement of changes in beneficial ownership that Section 16 insiders (officers, directors and more-than-10% holders) file to report transactions that were exempt from, or eligible for deferral from, Form 4 reporting. It is due within 45 days after the end of the company's fiscal year.

How it works

Most insider transactions must be reported on Form 4 within two business days. A narrow set can wait until Form 5, including:

• Certain small acquisitions below the reporting thresholds.
• Some gifts and transfers that were exempt under the rules in force when they occurred.
• Transactions the insider should have reported on Form 4 but did not (a late catch-up).

If an insider has nothing to report for the year, no Form 5 is required, though some companies ask for a written statement confirming that. Many insiders voluntarily report deferrable transactions on Form 4 instead, so plenty of companies see few or no Form 5 filings.

Form 5 filings cluster in February for calendar-year companies, since the deadline falls about mid-February.

Why it matters for traders

Form 5 is rarely market moving because it reports old, usually small or non-economic transactions. Still, it can reveal things worth noting: large gifts of stock (sometimes made shortly before bad news, which regulators and academics have studied), or a pattern of late reporting that suggests weak compliance. Delinquent Section 16 filings must also be disclosed in the company's proxy statement.

Example

A director of Cobalt Ridge Mining (ticker CBRM) gifted 5,000 shares to a family foundation in July and did not report it then. The company's fiscal year ends December 31, so the director's Form 5, filed by mid-February, lists the July gift with code G.

FAQ

When is Form 5 due?

Within 45 days after the end of the issuer's fiscal year. For a calendar-year company that is mid-February.

Is Form 5 the same as Form 4?

They use a similar layout, but Form 4 reports changes within two business days while Form 5 is an annual catch-up for exempt or deferred transactions.