Form 4 Transaction Codes: 2026 Practitioner Walkthrough

If you are preparing a Form 4 for filing on EDGAR, the single letter you enter in Column 3 of Table I or Column 4 of Table II is not a formality. It determines whether the transaction is exempt from Section 16(b) short-swing profit recovery, whether the SEC's data analytics flag it for review, and whether you will be filing a Form 4/A nine days later to correct it. This walkthrough covers every code, the most common selection errors, and the 2026 developments that expanded the filer population.

Key takeaway: The SEC defines 20 transaction codes across five families, governed by Instruction 8 to Form 4. Picking the wrong code is an amendment obligation, and some wrong codes carry enforcement exposure that goes well beyond a clerical fix.

For the full legal treatment of Section 16(b) exemption mechanics, see Finrep's Section 16 Transaction Codes: 2026 Complete Guide. This article stays on the practical layer: how to select the right code, where filers go wrong, and what the 2026 landscape adds.

The Complete Form 4 Transaction Code Table

All 20 codes, grouped as the SEC's Ownership Form Codes page organises them. The SEC's own Investor Bulletin covers only 10 of these; the remaining 10 are where compliance teams most often have questions.

How to Select the Right Code: Step by Step

Work through these questions in order for each transaction row.

Step 1: Is this a derivative security or a non-derivative security?

• Non-derivative (common stock, vested RSUs already converted to shares): use Table I.
• Derivative (options, warrants, convertible notes, unvested RSUs, equity swaps): use Table II.

Some codes appear in both tables (P, S, A, D, F, M). Others are Table II only (C, E, H, O, X, K). Getting the table wrong is as significant as getting the code wrong.

Step 2: Is this a market transaction or a compensation/plan transaction?

• Open-market purchase with personal funds: P.
• Open-market sale: S.
• Compensation grant from the issuer (RSU award, option grant, performance share): A.
• Tax withholding on RSU vesting or option exercise: F.
• Voluntary sell-back or surrender of shares to the issuer: D.
• Exercise or conversion of a derivative that qualifies under Rule 16b-3: M.
• Discretionary election within a 401(k) or similar plan: I.

Step 3: If it is a derivative exercise not covered by Rule 16b-3, is the option in the money?

• Compare the exercise price to the market price on the exercise date.
• Exercise price below or equal to market price (in-the-money or at-the-money): X.
• Exercise price above market price (out-of-the-money): O.

This O/X distinction trips up filers who assume all option exercises are X. The test is mechanical: pull the closing price on the exercise date and compare.

Step 4: Does the transaction fit any specific code above?

• Gift to a family member or charity: G.
• Inherited securities: W.
• Voting trust deposit or withdrawal: Z.
• Small acquisition under $10,000 in a six-month period (Rule 16a-6): L.
• Tender offer disposition in a change of control: U.
• Equity swap or hedging instrument: K.
• Conversion of a derivative (not under Rule 16b-3): C.
• Expiration of a short derivative position: E.
• Expiration or cancellation of a long derivative with value received: H.

Step 5: If nothing above fits, use J, but add a footnote.

Code J is the catch-all. Instruction 8 to Form 4 requires a mandatory explanatory footnote whenever J is used. Filing J without a footnote is itself a compliance violation. And as discussed below, J-coded transactions now attract active enforcement scrutiny.

The Five Codes That Cause the Most Amendments

Code A vs. Code P: The Most Common Error

A is a compensation grant. P is a market purchase. They are not interchangeable.

Code A covers acquisitions pursuant to Rule 16b-3(d): the compensation committee awarded equity to the insider. The insider did not spend personal capital. Code P means the insider went to the market and bought shares with their own money.

Confusing the two is the single most common Form 4 amendment trigger. In May 2026, Runway Growth Finance Corp. filed a Form 4/A on EDGAR correcting three separate transactions for CFO/COO Thomas B. Raterman: 2,900 shares at $6.67, 100 shares at $6.67, and 7,000 shares at $6.335, all originally reported as code A. The explanation: "This amended Form 4 amends such filing to report the transaction codes in Column 3 as 'P' for such transactions. [The original filing] inadvertently reported the transaction codes in Column 3 as 'A'." The amendment was filed approximately nine days after the original.

The practical test: did the insider pay market price from personal funds? If yes, it is P. Did the compensation committee approve an equity award? If yes, it is A.

Code F vs. Code D: Tax Withholding vs. Voluntary Surrender

Both codes reduce share count. They are not the same.

Code F covers the net-share settlement that happens automatically when RSUs vest or options are exercised: the company withholds shares to cover the tax liability. The insider did not choose to sell; the plan mechanics required it. The SEC's code definition is precise: "Payment of exercise price or tax liability by delivering or withholding securities incident to the receipt, exercise or vesting of a security issued in accordance with Rule 16b-3."

Code D is different: it covers a voluntary disposition back to the issuer under Rule 16b-3(e), such as surrendering unvested shares on departure or returning shares under a plan provision. The insider made a choice; F is mechanical.

Using D when F is correct overstates the insider's discretionary activity and can distort how the transaction is read by investors and enforcement screens.

Code M and the Pairing Requirement

A Table II code M entry must be paired with a Table I entry, also typically coded M.

When an insider exercises a derivative security that qualifies under Rule 16b-3 (a compensatory option, for example), the exercise appears in Table II as code M for the derivative being converted. The underlying shares received must also appear in Table I, again coded M. Omitting the Table I entry is a structural error.

A canonical EDGAR example: in October 2012, 3M CFO David Meline exercised 16,636 shares via a cashless sell-to-cover option exercise. The Form 4 shows code M for the 16,636 shares acquired (Table I), code S for 12,482 shares sold at $87.80 and 506 shares sold at $87.81 to cover the exercise price and taxes, and code G for a prior gift to his spouse. The footnote explains: "This Form is being filed to report the exercise of a 3M stock option by means of a cashless-sell-to-cover method (selling enough shares to cover option share purchase price, fee and taxes)."

Note also: a Rule 10b5-1 plan sale is still coded S. The plan's existence does not change the code; it belongs in a footnote and, for filings on or after April 1, 2023, in the 10b5-1 checkbox column. For more on plan mechanics, see Finrep's Rule 10b5-1 Trading Plan Requirements: 2026 Compliance Guide.

Code V: A Modifier, Not a Transaction Type

V is not a standalone transaction code. It is a timing flag in a separate column.

V signals that the insider chose to report a transaction on Form 4 that could have been deferred to Form 5. It appears in the V column adjacent to the primary transaction code, not in Column 3 itself. Many practitioners treat V as a transaction type; it is not. Always pair V with the underlying code (P, G, L, etc.) that describes what actually happened.

Code G and the 2022 Gift Reporting Change

Before the SEC's 2022 insider trading rule amendments, gifts could be deferred to Form 5. They now must be reported on Form 4 within two business days, the same deadline as any other reportable transaction. Code G's practical importance increased materially as a result. Estate planning transfers, charitable donations, and family trust transfers all fall here. The SEC Investor Bulletin confirms G is classified under "Other Section 16(b) Exempt Transaction" codes.

Code J: The Enforcement Red Flag

Code J is the catch-all for transactions that fit no other code. It is also, according to a landmark 2024 academic paper, a systematic insider trading concealment vector.

In 2024, Sureyya Burcu Avci, Cindy A. Schipani, H. Nejat Seyhun, and Andrew Verstein published "Insider Trading by Other Means" in the Harvard Business Law Review. Drawing on a database covering essentially all stock trades since 1992, the paper found that insiders using J codes and other concealment strategies outperform the market by up to 20% on average, and that the paper estimates insiders sell overvalued stock worth more than $100 billion per year using these techniques.

The authors were direct about what regulators should do:

"Investigators have been unduly passive with respect to insider trading proxies. Code J is a strong signal that insider trading may be underway. Investigators should, at the very least, treat suspicious J transactions as worthy of inquiry. Indeed, they should probably go further and prioritize J-coded transactions more aggressively than ordinary S transactions.", Avci, Schipani, Seyhun, and Verstein, TheCorporateCounsel.net

Late-filed J-coded transactions are flagged as especially suspicious:

"Most centrally of all, investigators should take late-filed J-coded transactions to be highly suspicious. Our findings indicated intense abnormal returns with J-coded transactions are reported long after the transaction took place.", Avci et al., ibid.

The same research group's earlier work on insider gifts directly influenced the SEC's 2022 rule changes, which means the SEC Enforcement Division is likely paying attention to this paper too.

What this means for compliance teams:

• Before using J, confirm no other code fits. J is a last resort, not a convenience.
• If J is the correct code, the explanatory footnote is mandatory under Instruction 8. A J without a footnote is a violation on its face.
• J transactions referencing Rule 16b-3 or "distributions from investment funds" are specifically identified in the paper as suspiciously well-timed. If the transaction genuinely falls into a named Rule 16b-3 category, use the corresponding code (A, D, F, I, or M), not J.
• Late J filings attract the highest scrutiny. If a J-coded transaction was not filed within the two-business-day window, the amendment exposure compounds the enforcement risk.

Intentional misstatements on Form 4 constitute federal criminal violations under 18 U.S.C. 1001 and 15 U.S.C. 78ff(a), as stated on the face of every Form 4 filing.

2026 Update: HFIAA and the FPI Code Selection Trap

The Holding Foreign Insiders Accountable Act (HFIAA), signed into law in December 2025 as part of the 2026 National Defense Authorization Act, extended Section 16(a) reporting to officers and directors of foreign private issuers effective March 18, 2026. The SEC adopted implementing rules on February 27, 2026. Ten percent owners of FPIs remain exempt.

This is the largest expansion of Form 4's reach in decades, and it creates a specific code selection trap that no existing explainer addresses.

FPI Insiders Must Use Rule 16b-3 Codes Even Though Section 16(b) Does Not Apply to Them

Section 16(b) short-swing profit disgorgement does not apply to FPI insiders. A compliance officer at a newly covered FPI might reasonably conclude that the Rule 16b-3 codes (A, D, F, I, M) are irrelevant to their filings. That conclusion is wrong.

The SEC explicitly clarified in its February 2026 adopting release that FPI insiders must use all transaction codes listed in the Instructions to Forms 4 and 5, including those applicable to Rule 16b-3 transactions. As summarised by Alan Dye at TheCorporateCounsel.net: "The release also notes that directors and officers of FPIs should use the transaction codes listed in the Instructions for Forms 4 and 5, including those applicable to transactions qualifying for an exemption from Section 16(b), even though directors and officers of FPIs are not subject to Section 16(b)."

The SEC also clarified that the exemption language in Rule 16a-3(g)(1) and (f)(1) cannot be used as a reporting escape hatch. As Mayer Brown's Liz Walsh and Jennifer Zepralka explained in their Harvard Law School Forum memo: "language in Rule 16a-3(g)(1) and (f)(1) and the Instructions to Forms 4 and 5 establishing reporting requirements for transactions exempted from Section 16(b) should not be read to exempt directors and officers of FPIs from reporting transactions otherwise required by Section 16(a) based on the inapplicability of Section 16(b) to FPIs."

Practical steps for FPI compliance teams:

1. Map every equity compensation event (grants, vesting, tax withholding, option exercises) to the correct Rule 16b-3 code (A, F, or M) exactly as a domestic filer would.
2. Note that the 2026 HFIAA rules added an optional Box 2a to Forms 4 and 5 for a foreign trading symbol, relevant where the security trades on both US and non-US markets. Update EDGAR filing templates accordingly.
3. Optional postal code and country code fields were also added to Forms 3, 4, and 5 for non-US addresses.
4. Check whether the March 5, 2026 SEC exemption order applies to your specific FPI. The SEC granted partial relief for certain FPI officers and directors; the scope of that exemption determines whether Form 4 filing obligations attach at all.
5. SEC Chair Atkins indicated in the February 2026 adopting release that the SEC is still evaluating whether to exercise authority to exempt persons, securities, or transactions where foreign law imposes substantially similar requirements. Monitor for further guidance.

For the full FPI deadline and filing mechanics, see Finrep's March 18, 2026: The Section 16 Deadline Every Foreign Private Issuer Director Must Know.

What to Do When You File the Wrong Code

A wrong transaction code requires a Form 4/A amendment. There is no de minimis exception.

The amendment mechanics:

1. File a Form 4/A on EDGAR as soon as the error is identified. The form carries the same two-business-day spirit, though the rules do not specify a correction deadline. Delay compounds risk.
2. In the Explanation of Responses field, state clearly what was wrong and what the correct code is. The Runway Growth Finance Form 4/A is a clean template: "This amended Form 4 amends such filing to report the transaction codes in Column 3 as 'P' for such transactions. [The original filing] inadvertently reported the transaction codes in Column 3 as 'A'."
3. Correct every row that carried the wrong code. The Runway Growth Finance amendment corrected three separate transaction rows in a single Form 4/A.
4. If the wrong code was J and the correct code is something more specific, the amendment also removes the J-code enforcement signal from the filing record.

For the broader enforcement consequences of late or incorrect filings, see Finrep's SEC Late Filing Penalties: Section 16 Enforcement in 2026.

Form 4 Transaction Codes: FAQ

What is the difference between code A and code P on Form 4? Code A is a compensation grant from the issuer under Rule 16b-3(d): the compensation committee awarded equity, and the insider paid nothing. Code P is an open-market or private purchase where the insider spent personal capital at market price. Confusing the two is the most common amendment trigger, as shown by the May 2026 Runway Growth Finance Form 4/A.

When do I use code F instead of code D? Use F when shares are withheld automatically to cover taxes on RSU vesting or to pay the exercise price on an option, under the plan's net-settlement mechanics. Use D when the insider voluntarily returns or surrenders shares to the issuer under Rule 16b-3(e). Both reduce share count, but F is mechanical and D is discretionary.

Does a Rule 10b5-1 plan sale change the transaction code? No. A sale under a 10b5-1 plan is still coded S. The plan's existence belongs in a footnote and, for filings on or after April 1, 2023, in the 10b5-1 checkbox column. For plan requirements, see Finrep's Rule 10b5-1 Trading Plan Requirements: 2026 Compliance Guide.

What is the V column on Form 4? V is not a transaction code. It is a timing modifier in a separate column that signals the insider reported a transaction earlier than required (typically a transaction that could have waited for Form 5). Always pair V with the primary transaction code in Column 3.

Do Form 4 and Form 5 use the same transaction codes? Yes. The same 20-code taxonomy applies to both forms. Form 5, due within 45 calendar days after the company's fiscal year end, uses identical codes for transactions reported annually rather than within two business days.

Are J-coded transactions really an enforcement risk? Yes, and the risk is growing. The 2024 Avci, Schipani, Seyhun, and Verstein paper in the Harvard Business Law Review found that J-coded transactions outperform the market by up to 20% on average and that essentially no one has been prosecuted for these suspicious trades. The authors explicitly called for the SEC to prioritise J-coded transactions more aggressively than ordinary S transactions. The same research group's prior work influenced the SEC's 2022 rule changes, making further regulatory action plausible.

Which codes apply only to Table II (derivative securities)? C, E, H, O, X, and K are primarily or exclusively Table II codes. M appears in both tables when a derivative exercise is reported: Table II for the derivative being exercised, Table I for the underlying shares received.