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SEC Form N-SAR

SEC Form N-SAR
InvestingLaws and RegulationsSECSec and Regulatory Bodies

What Was SEC Form N-SAR?

SEC Form N-SAR is a U.S. Securities and Exchange (SEC) filing that is specific to registered investment management companies. It requires that those companies disclose important financial information (e.g., any sales of shares or their portfolio turnover rate). This information is usually included in the company's shareholder reports. Form N-SAR was phased out in 2018, supplanted by SEC Form N-CEN.

Understanding Form N-SAR

Preceding the Sarbanes-Oxley Act of 2002, form N-SAR was also required to be filed under Sections 13 and 15(d) of the Securities Exchange Act of 1934. Form N-SAR and its connected filings are all covered under Section 30 of the Investment Company Act of 1940, which requires investment companies and trusts to file semiannual and annual reports with the SEC. The act also eliminated the requirement that form N-SAR be certified by a registered investment company's principal executive and financial officers.

SEC Form N-CEN has supplanted N-SAR, and registered funds must use N-CEN to report annual data or what the SEC calls census-type information. Reports are required to be filed annually within 75 days of the end of the fund's fiscal year. Reports had been required to be filed semi-annually with Form N-SAR.

Form N-CEN includes many of the same elements as Form N-SAR, yet the SEC has supplanted some of the obsolete items with additional relevant ones. For instance, Form N-CEN has streamlined and refreshed information reported to the SEC to reflect current needs regarding securities lending and exchange traded funds. Where possible, Form N-CEN also eliminated some of the redundant information that had been reported to the SEC on other SEC forms.

SEC Form N-SAR vs. Other SEC Filings

SEC Form N-SAR, which applies to registered investment management companies, is just one of several critical SEC forms that investors and managers should know when conducting business in the financial services industry.

SEC Form ADV

Investment advisors use SEC Form ADV, for instance, to register with both the SEC and state securities authorities. The form details any, and all disciplinary actions were taken against the advisor, along with their services, fees, professional background, and current and proposed business practices.

Part One

Form ADV consists of three parts. Part one requires information about the investment adviser's business, ownership, clients, employees, business practices, affiliations, and any disciplinary events of the adviser or its employees.

Part Two

Part two contains the requirements for brochure and brochure supplements. This includes information that must be written in plain English — meaning not convoluted jargon — on the types of advisory services offered, the adviser's fee schedule, disciplinary information, and conflicts of interest. Part two also includes the educational and business background of management and key advisory personnel of the adviser.

Part Three

Part three contains similar information to Part two, with the exception of this section pertains to investment advisors who have retail clients. The SEC mandates certain disclosures that are to be written in plain English. Part three contains the "relationship summary," requiring a summary of the types of services offered, including the fees that clients should pay. Different items include any conflicts of interest, legal and disciplinary history, code of conduct, and any questions to ask the investment adviser.

SEC Forms S-1 and S-1/A

SEC Form S-1 and S-1/A are also significant with respect to initial registration for new securities of current or pending public companies. Companies must have a S-1 filing before their shares can be listed on a national exchange.

Often they will enlist the assistance of a investment bank or syndicate of investment bankers to assist draft and file With forming S-1. The form includes itemized information on the planned use of the proceeds from the sale, current business model and competition, offering price methodology, and any dilution that will happen. These are just a couple of important sections; investors should peruse the entire form for comprehensive information.

Highlights

  • SEC Form NSAR contained financial data such as sales of shares, portfolio turnover rate, and data from shareholder reports.
  • As of June 1, 2018, Form N-SAR has been supplanted by Form N-CEN.
  • SEC Form NSAR was a filing with the SEC that registered the financial information of investment management companies.