Schedule 13G
The Securities and Exchange Commission (SEC) Schedule 13G form is an alternative filing for the Schedule 13D form and is used to report a party's ownership of stock which exceeds 5% of a company's total stock issue. Schedule 13G is a shorter version of Schedule 13D with fewer reporting requirements. Schedule 13G can be filed in lieu of the SEC Schedule 13D form as long as the filer meets one of several exemptions.
Both Schedule 13D and Schedule 13G forms are referred to as "beneficial ownership reports." According to the SEC, a beneficial owner is anyone who directly or indirectly shares voting power or investment power. These forms are intended to provide information about individuals who have significant holdings in publicly-traded companies and thus, allow for other investors and other interested parties to make informed decisions about their own investments. The ownership of over 5% of a publicly-traded stock is considered significant ownership and reporting this to the public is a requirement.
Definition: The 13G form is a document required by the U.S. Securities and Exchange Commission (SEC) to report shareholders who own more than 5% of a company's shares. Compared to the 13D form, the 13G form is a simplified version applicable to filers who meet specific exemption criteria.
Origin: The origin of the 13G form dates back to the 1970s when the SEC mandated detailed ownership reports for shareholders holding more than 5% of a company's shares to increase market transparency and protect investors. The 13G form was introduced as a simplified version of the 13D form to reduce compliance burdens.
Categories and Characteristics: There are three main types of 13G forms: 1. Initial 13G: Filed when an investor first acquires more than 5% of a company's shares. 2. Amended 13G: Filed when there are changes in the ownership percentage or other significant information. 3. Annual 13G: Filed annually to ensure the accuracy of the information. The 13G form is characterized by its simplified reporting requirements, suitable for passive investors or shareholders meeting specific exemption criteria.
Specific Cases: Case 1: In January 2023, an investment fund purchased shares of a tech company, reaching a 6% ownership. Since the fund qualifies as a passive investor, it filed a 13G form instead of a 13D form. Case 2: In February 2024, an institutional investor increased its ownership in a healthcare company from 5.5% to 7%. The investor filed an amended 13G form to update the ownership information.
Common Questions: 1. Q: What is the main difference between the 13G and 13D forms? A: The 13G form is a simplified version of the 13D form, suitable for passive investors or shareholders meeting specific exemption criteria. 2. Q: When is a 13G form required? A: A 13G form is required when an investor first acquires more than 5% of a company's shares or when there are changes in the ownership percentage.
