What is the rule 3b 16 under the Securities Exchange Act of 1934? (2024)

What is the rule 3b 16 under the Securities Exchange Act of 1934?

Title 17 section 240.3b–16(a) (“Rule 3b–16(a)”) defines certain terms in the definition of “exchange” under section 3(a)(1) of the Exchange Act to include any organization, association, or group of persons that: (1) brings together the orders for securities of multiple buyers and sellers; and (2) uses established, non- ...

What is Section 16 B of the Securities Exchange Act of 1934?

Section 16(b) of the act recognizes that profits realized by officers, directors, or 10-percent stockholders from any purchase and sale or any sale and purchase of any equity security within a period of 6 months rightfully belong to the corporation and should be recoverable in an action by, or on behalf of, the ...

What is a section 16 person?

Section 16 of the Exchange Act applies to an SEC reporting company's directors and officers, as well as shareholders who own more than 10% of a class of the company's equity securities registered under the Exchange Act.

What is a pecuniary interest section 16?

(i) The term pecuniary interest in any class of equity securities shall mean the opportunity, directly or indirectly, to profit or share in any profit derived from a transaction in the subject securities.

What is the SEC rule 3b 3?

3 Rule 3b-3 under the Exchange Act, 17 CFR 240.3b-3, defines a short sale as "any sale of a security which the seller does not own or any sale which is consummated by the delivery of a security borrowed by, or for the account of, the seller." Pursuant to Rule 3b-3, a seller of an equity security subject to Rule 10a-1 ...

What are the exemptions for Section 16 B?

Both the acquisition and the disposition of equity securities shall be exempt from the operation of section 16(b) of the Act if they are: (a) Bona fide gifts; or (b) transfers of securities by will or the laws of descent and distribution.

What does Section 16 B of the Securities Exchange Act of 1934 provide quizlet?

Section 16(b) of the Securities Exchange Act of 1934 provides for the: recapture by a corporation of short-swing profits resulting from insider trading. Liability under Section 16(b) is strict liability, which means that: neither scienter nor negligence is required.

What is the purpose of Section 16?

SEC Section 16 of The Securities Exchange Act of 1934 requires corporate insiders to publicly disclose their company affiliations, material changes in their holdings or unreported insider transactions through various regulatory filings with the SEC.

What is the difference between Section 16 and 3b 7?

Rule 16a-1(f) encompasses all of the persons included in Rule 3b-7's definition of “executive officer” – with the only significant difference being that the relevant Section 16 rule specifically includes the principal financial officer and the principal accounting officer, neither of whom are specifically referenced in ...

What are Section 16 basics?

Under Section 16(a), a person who is a Section 16 insider must report such person's initial ownership of the company's equity securities, including derivatives such as stock options, warrants, rights and other convertible securities, after an initial triggering event (see Practice Note, Section 16 Reporting: Why, How ...

What is the rule 16b 3?

Rule 16b-3 exempts issuer equity securities transactions between the issuer (including an employee benefit plan sponsored by the issuer) and an officer or director.

Who is a Section 16 insider?

Any director, executive officer, or beneficial owner of greater than 10% of a class of registered equity securities of a public company. These people are subject to ownership reporting obligations and trading limitations under Section 16. See Form 3, Form 4, Form 5, Section 16, and short-swing profits.

What is an example of a pecuniary interest?

Pecuniary interests involve an actual or potential financial gain or loss. They may result from the employee or a related party or close friend owning property, holding shares or a position in a company bidding for government work, accepting gifts or hospitality, or receiving an income from a second job.

What is Rule 3b-7 of the securities Exchange Act of 1934?

Rule 3b-7, applicable to the identification of executive officers in Exchange Act reports such as proxy statements and annual reports on Form 10-K, defines the term as president, any vice president of the registrant in charge of a principal business unit, division or function (such as sales, administration or finance), ...

What is SEC Rule 3b-7?

§ 240.3b-7 Definition of “executive officer”.

Executive officers of subsidiaries may be deemed executive officers of the registrant if they perform such policy making functions for the registrant.

What is Rule 17a 3 of the securities Exchange Act of 1934?

New paragraph (a)(17)(iii) of Rule 17a-3 requires each broker-dealer to create a record for each account indicating that each customer was furnished with a copy of any written agreement entered into on or after the effective date of this paragraph pertaining to that account.

Does Section 16 apply to foreign private issuers?

The SEC has long exempted foreign private issuers from the requirements of Section 16 of the Exchange Act, along with other provisions of the Exchange Act (e.g., U.S. proxy rules), in an effort to accommodate home country practices and facilitate cross-listings by non-U.S. companies.

What is the Securities Exchange Act of 1934 simplified?

AN ACT To provide for the regulation of securities exchanges and of over-the- counter markets operating in interstate and foreign commerce and through the mails, to prevent inequitable and unfair practices on such exchanges and markets, and for other purposes.

What is Section 36 of the Securities Exchange Act of 1934?

Section 36 of the Securities Exchange Act of 1934 (Exchange Act) authorizes the Commission, by rule, regulation, or order, to exempt, either conditionally or unconditionally, any person, security, or transaction, or any class or classes of persons, securities, or transactions, from any provision or provisions of the ...

What is Section 12 B or G of the Securities Exchange Act of 1934?

By registering securities under Section 12(b) or Section 12(g) of the Exchange Act, a company becomes subject to the periodic and current reporting requirements of Section 13(a) of the Exchange Act and, as a result, becomes a reporting company.

What is a Section 16 resolution?

Section 16 Resolutions Approving the Acquisition of Buyer Securities by Insiders in a Merger. Board resolutions approving the acquisition of certain buyer derivative or equity securities by persons who are or will become officers and directors of the acquirer in connection with a merger.

What happens if you own more than 20% of a public company?

An investor subject to U.S. GAAP that owns 20% or more of the company's voting stock (but not control of the company) is presumed to have significant influence over the company and is generally required to account for its investment on the equity method by including its proportionate share of the company's net income/ ...

What is the 13 A Exchange Act?

Exchange Act Section 13(a) and the rules promulgated thereunder require issuers of securities registered pursuant to Exchange Act Section 12 to file with the Commission current and accurate information in periodic reports, even if the registration is voluntary under Section 12(g).

What is a pecuniary payment?

consisting of or given or exacted in money or monetary payments: pecuniary tributes.

What is the difference between pecuniary and non-pecuniary?

Pecuniary damages are economic losses that can be easily quantifiable - money lost, future lost earnings, medical bills, etc. Non-pecuniary damages are things that have no clear monetary value that have been damaged by the defendant. These include mental anguish and pain and suffering.