Which form is required for corporate insiders who trade stocks in the open market?

Corporate insiders are individuals who have access to non-public, material information about a company, such as executives, directors, and significant shareholders. For these insiders, the trading of their company's stock in the open market is regulated to ensure transparency and compliance with securities laws.

Form 4 is the specific document required for corporate insiders to report their transactions in the company's securities to the Securities and Exchange Commission (SEC). This form must be filed within two business days of the transaction, and it provides essential details about the amount of stock bought or sold, the price, and the date of the transaction. The requirement to file Form 4 allows for public oversight of insider trading activities and helps prevent illegal trading based on undisclosed information.

Other forms mentioned serve different purposes. Form 3 is used to report initial ownership of securities when an insider first becomes a reporting person. Form 5 is used for reporting certain transactions that were not previously reported on Form 4, typically for transactions that occurred during the year but were exempt from reporting at the time. Form 1 does not pertain to insider trading disclosures.

Thus, Form 4 is the correct choice as it directly pertains to the requirement for corporate insiders to disclose their stock trading activities to ensure accountability and transparency in