What Are the 15 USC 78m(a) Reporting Requirements?

The provision 15 U.S.C. § 78m is a component of the Securities Exchange Act of 1934. This federal law establishes that certain publicly traded companies must provide ongoing disclosures to the public to ensure that investors have access to regular and timely information about a company’s financial condition and business activities.

This legal framework requires subject companies to file specific reports with the U.S. Securities and Exchange Commission (SEC). These reports are intended to keep the information in a company’s initial registration statement current, and the SEC is empowered to prescribe the specific rules and forms for these reports.

Determining Applicability of Reporting Requirements

The duty to file reports under Section 13(a) of the Exchange Act, which is the codification of 15 U.S.C. § 78m, applies specifically to companies that are considered “reporting companies.” A company attains this status through one of several triggers related to the registration of its securities, most commonly under Section 12 of the Exchange Act or by filing a registration statement for a public offering under the Securities Act of 1933.

One primary trigger is the listing of securities on a national exchange. When a company lists its stock on an exchange like the New York Stock Exchange or NASDAQ, it must register that class of securities, which automatically subjects the company to periodic reporting requirements. A company can also become a reporting entity based on its size and the number of its shareholders, even if its securities are not listed on an exchange. This applies if a company has total assets exceeding $10 million and a class of equity securities held of record by either 2,000 persons, or 500 persons who are not accredited investors.

Finally, raising capital from the public through a securities offering also initiates reporting duties. When a company files a registration statement for an initial public offering (IPO) that is declared effective by the SEC, the company is immediately subject to reporting requirements.

Required Periodic Reports

The reporting framework includes regularly scheduled reports that provide a comprehensive look at a company’s performance. The most detailed of these is the annual report, known as Form 10-K. This document is a year-end summary of the company’s business and financial condition, containing audited annual financial statements, a description of the business, and risk factors.

Companies must also file quarterly reports on Form 10-Q for each of the first three fiscal quarters, with the fourth quarter’s financial data included in the annual Form 10-K. The Form 10-Q is a less detailed update compared to the 10-K and provides a timely snapshot of the company’s performance between annual filings. It contains unaudited interim financial statements and an updated Management’s Discussion and Analysis (MD&A) to disclose any material changes since the last annual report.

While the financial statements in a 10-Q are not audited, they must be prepared in accordance with U.S. Generally Accepted Accounting Principles (GAAP).

Current Reporting Obligations

Beyond scheduled filings, companies must report certain significant events as they happen by filing a Current Report on Form 8-K. Unlike the 10-K and 10-Q, the 8-K is not filed on a regular timetable but is instead triggered by specific material events. The purpose is to ensure the market is promptly informed of major developments that could impact a company’s financial condition or share price.

The SEC has defined a list of events that trigger a Form 8-K filing, including:

• Entering into, amending, or terminating a material definitive agreement
• Completing a significant acquisition or disposition of assets
• Commencing bankruptcy or receivership proceedings
• Creating a direct financial obligation or an obligation under an off-balance sheet arrangement
• Changes in the company’s certifying accountant
• Changes in control of the company
• The departure and election of directors and principal officers
• Material cybersecurity incidents

Key Information and Certification Requirements

A central component of both the Form 10-K and Form 10-Q is the financial statements. For the annual Form 10-K, these statements must be audited by an independent registered public accounting firm. In contrast, the interim financial statements in a quarterly Form 10-Q are reviewed by accountants but are not required to be fully audited.

The Management’s Discussion and Analysis (MD&A) section is another element. This narrative provides context for the financial statements, offering management’s perspective on the company’s financial performance, condition, and future prospects. The MD&A explains the story behind the numbers, discussing known trends or uncertainties that could materially impact the company.

A legal requirement tied to these reports stems from the Sarbanes-Oxley Act of 2002 (SOX), which introduced mandatory certifications by a company’s principal executive officer (CEO) and principal financial officer (CFO). Under Section 302 of SOX, these officers must personally certify that they have reviewed the report and that, based on their knowledge, it does not contain any material misstatements or omissions. This certification also confirms their responsibility for establishing and maintaining disclosure controls and procedures.

An additional certification is required under Section 906 of SOX. This certification states that the periodic report fully complies with the Securities Exchange Act and that the information contained in the report fairly presents the financial condition and results of operations of the company.

The Report Filing Process

Once prepared, reports are submitted to the SEC electronically through the Electronic Data Gathering, Analysis, and Retrieval (EDGAR) system. EDGAR serves as the official online portal for all required filings, making information accessible to the public almost immediately. Companies must first apply for access to EDGAR to receive unique identifying codes, known as a Central Index Key (CIK), used in all filings.

The deadlines for filing periodic reports vary based on the size of the company, which is determined by its public float. Large accelerated filers, with a public float of $700 million or more, have 60 days after their fiscal year-end to file a Form 10-K and 40 days after their quarter-end for a Form 10-Q. Accelerated filers, with a public float between $75 million and $700 million, have 75 days for the 10-K and 40 days for the 10-Q. All other non-accelerated filers have 90 days for the 10-K and 45 days for the 10-Q.

The timeline for event-driven reports is much shorter. For most triggering events, a Form 8-K must be filed within four business days of the event’s occurrence. After a report is successfully submitted to the EDGAR system, typically before the 5:30 p.m. Eastern Time deadline for same-day filing credit, it becomes part of a vast public database that can be searched by anyone, providing a transparent and comprehensive record of a company’s reporting history.