Section 16 Officer

An assistant secretary would not ordinarily be considered an officer of a company under section 16 a unless such person performs any of the functions that would make such person an officer as defined in rule 16a 1 f.

Section 16 officer. 1 solely for purposes of determining whether a person is a beneficial owner of more than ten. A the term beneficial owner shall have the following applications. These terms shall not be limited to section 16 a of the act but also shall apply to all other subsections under section 16 of the act.

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. 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. Obligations of section 16 officers.

How many section 16 officers should a company have. Rule 16a 2 persons subject to section 16. 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.

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. Section 13 k of the exchange act prohibits sec reporting companies from making personal loans to their directors and officers. The sec recently made such a challenge however and lost in a federal court case involving a company s conclusions regarding its own officers.

Of course each company should examine its own facts and circumstances and apply the criteria in rule 16a 1 f to determine who within the company should be deemed to be a section 16 officer. 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 officer means every person who is directly or indirectly the beneficial owner of more than ten percent 10 of any class of any equity security other than an exempted security which is registered pursuant to section 12 of the securities exchange act of 1934 section 16 officers include officers or directors of the issuer of such security and those who perform a policy making.

Loans to directors and 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. May 23 2007 section 110.