What Kinds of Investment Banking Information Can You Find on the Securities and Exchange Commission's Website? - dummies

What Kinds of Investment Banking Information Can You Find on the Securities and Exchange Commission’s Website?

By Matt Krantz, Robert R. Johnson

Investment bankers must become familiar with the SEC. The SEC, the unit of the government responsible for overseeing the securities business, operates a database known as EDGAR, short for Electronic Data-Gathering Analysis and Retrieval. The EDGAR database is the best friend of many investment bankers who are trying to research companies and understand the very fine subtleties of their businesses.

The SEC performs all sorts of functions to insure the smooth and efficient functioning of the financial system. The SEC inspects companies’ accounting, looking for funny business, and supervises the issuance of new securities. The SEC’s role of running the EDGAR database, though, is of utmost importance to investment bankers. This database is the wellspring for information that drives many investment banking activities.

The EDGAR database is essential for investment bankers because it contains

  • The key financial filings that companies provide: Looking for a company’s annual report or quarterly statement? These forms and many more are all stored on EDGAR and are accessible anytime and for free online.

  • Reports showing who owns large pieces of companies: If you buy a stock, if you’re like most people, that’s a matter between you and your accountant. But large investors — those with $100 million or more of other people’s money to invest — have to provide a report called a 13F, showing their funds’ holdings.

    These documents can be telling for investment bankers looking to monitor the movements of large and influential investors. Similarly, investors who own more than 5 percent of a company must disclose that holding in EDGAR on a 13D filing.

  • News events and internal corporate details: Popular media outlets can be vital sources of news. But when a new development is extremely significant, companies must disclose them in the EDGAR database as an 8-K filing. Similarly, the juicy details about a company, including how much the executives are paid, are also available in EDGAR in the DEF 14A filings.

Remember the SEC typically only has detailed data on publicly traded companies or companies with debt owned by public investors. Private, or closely-held, companies are those owned by a relatively small number of private investors, where the shares aren’t available on a public market.