SEC Reporting Requirements

Question 1

What does the 1933 Securities Act Require Publicly Traded Companies to do?

Answer 1

Requires them to file a registration statement, and to provide each investor with a proxy statement before each shareholder’s meeting

Question 2

What does the 1934 Securities Act do?

Answer 2

Regulates the trading of securities after they are issued and provides the requirements for periodic reporting and disclosures.

Question 3

Where are the formal SEC rules found?

Answer 3

In the Code of Federal Regulations

Question 4

What are the governing regulations for the SEC (Which code sections)?

Answer 4

Regulation S-X and Regulation S-K

Question 5

What does regulation S-X govern?

Answer 5

The content of financial statements and financial statement disclosures. These include:

a. )Income Statement
b. ) Balance Sheet
c. ) Changes in stockholder’s equity
d. ) Cash Flow statement
e. ) Footnotes to financial statements
f. ) Qualification of accountants (Independence Rules)

Question 6

What does regulation S-K govern?

Answer 6

The form and content of nonfinancial statement disclosure. These disclosure are the content of the 10-K outside of the financial statements. The nonfinancial statement disclosures include:

a. ) Description of the business
b. ) Description of stockholder matters
c. ) Management’s discussion and analysis (MD&A)
d. ) Changes in and disagreements with accountants
e. ) Information on directors and management.

Question 7

What is the definition of a security?

Answer 7

Any note, stock, treasury stock, bond, debenture, evidence of indebtedness, certificate of interest or participation in any profit sharing agreement, collateral trust certificate, reorganization certificate, certificate or subscription, transferable share, investment contract, voting trust certificate, certificate of deposit for a security, fractional undivided interest in oil, gas, or other mineral rights, or in general, any interest or instrument commonly known as a “security”, or any certificate of interest or participation in, temporary

Question 8

What is the basic registration form for new securities?

Answer 8

Form S-1

Question 9

What financial information does a Form S-1 include?

Answer 9

A balance Sheet dated within 90 days of the filing. Part I also includes a prospectus which describes the issuing company, the business operation and risks, the financial statements and the expected use of the proceeds. Part 2 of the Form S-1 includes information about the cost of issuing and distributing the security, more detailed information about the directors and officers and additional financial statement schedules.

Question 10

What are the basic financial statement requirements included in the S-1?

Answer 10

1. ) Two years of Balance Sheets
2. ) Three years of income statements of cash flow and statements of shareholder’s equity
3. ) The financial statements must be audited
4. ) Prior statements are presented on a comparative basis
5. ) The SEC requires five years of selected financials

Question 11

What is the offering process? (Steps)

Answer 11

Issuer->Underwriter->Dealer->Public

Question 12

What are the arrangements that an Underwriter is contractually obligated to sell the securities?

Answer 12

1. ) Firm Commitment - The underwriter purchases the entire issue at a fixed price
2. ) Best Efforts - The underwriter sells as many shares as possible
3. ) All or none - If the underwriter is unable to sell all (or a significant portion) then the issue may be cancelled.

Question 13

What are some of the common forms required for disclosing relevant information about publicly traded firms?

Answer 13

1. ) Annual Filing - 10-K
2. ) Quarterly Filing - 10-Q
3. ) Report significant events affecting the company - Form 8-K
4. ) Management request for the right to vote through proxy for shareholders at meetings - Proxy Statement

Question 14

How are filing deadlines determined for forms required to be filed by publicly traded companies?

Answer 14

By the size of the company

1. ) Large Accelerated Filer - Company with worldwide market of outstanding voting and nonvoting common equity held by non-affliates of $700 or more
2. ) Accelerated Filer - Company with worldwide market of outstanding voting and nonvoting common equity held by non-affiliates of $75 million or more, but less than $700 million
3. ) Non-Accelerated Filer - Company with worldwide market value of outstanding voting and nonvoting common equity held by non-affiliates less than $75 million

Question 15

What are the filing deadlines for 10-K and 10-Q of the 3 types of companies (By Size)?

Answer 15

a. ) Large Accelerated - 10-K:60 days after year-end, 10-Q: 40 days after quarter end
b. ) Accelerated - 10-K: 75 days after year end, 10-Q: 40 days after quarter end
c. ) Non-Accelerated - 10-K: 90 days after fiscal year-end, 10-Q: 45 days after quarter-end.

Question 16

What are the requirements of a Form 10-K?

Answer 16

1.) Financial Statements must be audited by independent registered auditor. These statements include:
a.) 2 years of Balance Sheets
b.) 3 years of income statements, statements of cash
flows and statements of shareholder’s equity.
2.) In addition, there are significant disclosures related to:
a.) MD&A
b.) Reports on controls
c.) Management Certifications

Question 17

What are the requirements of a Form 10-Q?

Answer 17

1. ) Financial statements are not audited, but are reviewed by the auditor
2. ) Disclosures are not as extensive as the 10-K
3. ) Updated on significant matters since the last quarter, such as legal proceedings, changes in securities outstanding.

Question 18

What law prohibits the bribing of foreign officials?

Answer 18

The Foreign Corrupt Practices Act of 1977.

Question 19

What information does Management Discussion & Analysis Cover?

Answer 19

The firm’s financial condition, changes in financial condition, results of operations, liquidity, capital resources and operations, and indication in trends, significant events, and uncertainties.