SEC Form N-SAR

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, replaced by SEC Form N-CEN.

Understanding Form N-SAR

Prior to 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 all of its related filings are 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 removed the requirement that form N-SAR be certified by a registered investment company's principal executive and financial officers.

SEC Form N-CEN has replaced 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Form N-CEN includes many of the same elements as Form N-SAR, but the SEC has replaced some of the outdated items with more relevant ones. For example, Form N-CEN has streamlined and updated 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 example, 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, except 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 will need to pay. Other 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 an S-1 filing before their shares can be listed on a national exchange.

Often they will enlist the help of an investment bank or syndicate of investment bankers to help draft and file Form S-1. The form includes detailed information on the planned use of the proceeds from the sale, current business model and competition, offering price methodology, and any dilution that will occur. These are just a few important sections; investors should read the entire form for comprehensive information.