CandleFocus Glossary Editor
Schedule 13G is a filing form used by entities with a significant ownership in a corporation. According to the rules and regulations of the U.S. Securities and Exchange Commission (SEC), entities that own more than 5% of company stock must file a Scheduled 13G form with the SEC disclosing their ownership holdings. This allows shareholders involved with the company in question to have an accurate understanding of who owns it and how large their stake is.
The information provided when filing a Schedule 13G includes the filer’s name, address and type of filer, the nature of the person’s ownership, the securities and class of securities owned and the amount of securities owned. Those filing Schedule 13G must also provide information to help identify each transaction during the preceding 45 days that led to the ownership.
Schedule 13G filings must be updated within 10 days of any material change. Material changes include increases or decreases in the amount of securities entered on an existing Schedule 13G and the addition or deletion of a filing person. Parties that must file a Schedule 13G form include all registered broker-dealers, corporations, directors, executive officers and beneficial owners of more than 5%, but less than 20%, of a company’s outstanding voting securities.
Unlike the more complicated 13D filing, 13G provides fewer reporting requirements, offering an easier and less timely filing process. In order to take advantage of this simplified filing privilege, certain criteria must be met for a 13G filer: the security must be held by a passive investor, the filer must be a qualified institutional investor and the investor must have not acquired the securities in bulk.
For all the transparency offered through the Schedule 13G process, there are some significant weaknesses that have been addressed in more recent filings. For example, there is no requirement to provide a rationale behind the investments listed in the filing. Additionally, there is a 15-day delay between the date of the filing and the date the information is made publicly available.
Changes are being made to the SEC filing processes that could have a positive effect on business analytics. Aside from greater transparency, these changes will also facilitate a faster review of public filings and the sharing of information.
Overall, Schedule 13G provides a robust tool for shareholders to understand which entities are significantly involved in a given company. By providing specific information about investments, Schedule 13G is a valuable reporting mechanism that can be used to analyze ownership stake, increase transparency and improve corporate governance.
The information provided when filing a Schedule 13G includes the filer’s name, address and type of filer, the nature of the person’s ownership, the securities and class of securities owned and the amount of securities owned. Those filing Schedule 13G must also provide information to help identify each transaction during the preceding 45 days that led to the ownership.
Schedule 13G filings must be updated within 10 days of any material change. Material changes include increases or decreases in the amount of securities entered on an existing Schedule 13G and the addition or deletion of a filing person. Parties that must file a Schedule 13G form include all registered broker-dealers, corporations, directors, executive officers and beneficial owners of more than 5%, but less than 20%, of a company’s outstanding voting securities.
Unlike the more complicated 13D filing, 13G provides fewer reporting requirements, offering an easier and less timely filing process. In order to take advantage of this simplified filing privilege, certain criteria must be met for a 13G filer: the security must be held by a passive investor, the filer must be a qualified institutional investor and the investor must have not acquired the securities in bulk.
For all the transparency offered through the Schedule 13G process, there are some significant weaknesses that have been addressed in more recent filings. For example, there is no requirement to provide a rationale behind the investments listed in the filing. Additionally, there is a 15-day delay between the date of the filing and the date the information is made publicly available.
Changes are being made to the SEC filing processes that could have a positive effect on business analytics. Aside from greater transparency, these changes will also facilitate a faster review of public filings and the sharing of information.
Overall, Schedule 13G provides a robust tool for shareholders to understand which entities are significantly involved in a given company. By providing specific information about investments, Schedule 13G is a valuable reporting mechanism that can be used to analyze ownership stake, increase transparency and improve corporate governance.