Section 16 Officers

Loans to directors and officers.

Section 16 officers. In addition section 16 prohibits short selling by insiders of any class of the company s securities whether or not that class is registered under the exchange act. Rule 16e 1 provides that the section 16 e exemption does not apply to such arbitrage transactions by officers and directors. Section 13 k of the exchange act prohibits sec reporting companies from making personal loans to their directors and officers.

Companies may typically have between six and 12 section 16 officers. If pursuant to item 401 b of regulation s k 229 401 b the issuer identifies a person as an executive officer it is presumed that the board of directors has made that judgment and that the persons so identified are the officers for purposes of section 16 of the act as are such other persons enumerated in this paragraph f but not. Define section 16 officers.

How many section 16 officers should a company have. For the most part determining your section 16 officers is a fairly routine matter and the sec respects and rarely challenges these determinations due to their fact sensitive nature. The sec recently made such a challenge however and lost in a federal court case involving a company s conclusions regarding its own officers.

Means any person who is an officer within the meaning of rule 16a 1 f promulgated under the exchange act or any successor rule and who is subject to the reporting requirements under section 16 of the exchange act with respect to company s common stock. A a transaction s carried out by a director or officer in the six months prior to the director or officer becoming subject to section 16 of the act shall be subject to section 16 of the act and reported on the first required form 4 only if the transaction s occurred within six months of the transaction giving rise to the form 4 filing. Under section 16 a of the exchange act each person deemed to be an officer in accordance with rule 16a 1 f is required to file with the sec various.

Section 16 e exempts foreign and domestic arbitrage transactions from the other provisions of section 16. Section 16 is a rule within the securities exchange act of 1934 sea that articulates the regulatory filing responsibilities that directors officers and principal stockholders are legally.