Purpose:
- SEC Form 15-12B is filed by companies to voluntarily terminate the registration of their securities under Section 12(b) of the Securities Exchange Act of 1934.
- This form is used when a company no longer wishes to have its securities listed on a national securities exchange, such as the New York Stock Exchange (NYSE) or NASDAQ.
- By filing Form 15-12B, the company is effectively ending its reporting obligations under the Exchange Act, which reduces the burden of regulatory filings like the 10-K, 10-Q, and 8-K.
Filing Requirement:
- A company must file Form 15-12B when it meets certain criteria to deregister its securities:The company’s securities are held by fewer than 300 record holders.Alternatively, if the securities are held by fewer than 500 record holders and the company's total assets are less than $10 million at the end of the last fiscal year.
- The company’s securities are held by fewer than 300 record holders.
- Alternatively, if the securities are held by fewer than 500 record holders and the company's total assets are less than $10 million at the end of the last fiscal year.
- The form is also used when a company is delisting its securities from a national exchange, typically as part of going private, merging, or other strategic business decisions.
Process:
- Filing Deadline: Form 15-12B is filed when the company wishes to cease its obligations to report under Section 12(b), and the reporting requirement is suspended immediately upon filing.
- Form Contents: The form includes basic company information, the classes of securities being deregistered, and a certification that the company meets the required thresholds for deregistration.
- Effectiveness: Upon filing, the company is no longer obligated to submit reports required by the SEC for companies with registered securities, such as Forms 10-K, 10-Q, or proxy statements, unless the SEC has specific objections.
Importance for Companies:
- Reduction of Compliance Costs: Filing Form 15-12B helps companies save money and time by eliminating the need to comply with ongoing SEC reporting requirements. This can be especially beneficial for smaller or private companies that no longer see the value in remaining publicly listed.
- Strategic Flexibility: Deregistering securities allows a company to exit the public market or prepare for corporate actions like mergers or going private, without the regulatory burden of reporting to the SEC.
- Regulatory Relief: By terminating registration, the company is freed from various compliance obligations, which can simplify management and operations, particularly for companies that no longer wish to maintain a public listing.
Conclusion
SEC Form 15-12B is a critical form for companies seeking to voluntarily deregister their securities from a national exchange. By filing this form, companies can reduce compliance costs, exit public markets, and eliminate SEC reporting obligations while remaining in compliance with federal securities laws.