Yesterday, the SEC published proposed amendments—which the SEC voted unanimously to propose—to update the electronic filing requirements.  The proposed rule and form amendments would require that certain forms be filed or submitted electronically and would amend certain forms to require structured data reporting (i.e., XBRL). Most notably, the proposal would require electronic submission in PDF format of “glossy” annual reports.  According to SEC Chair Gary Gensler, the “proposed amendments are intended to modernize and increase the efficiency of the filing process—for filers, investors, or other interested parties.”  The comment period will be open for 30 days.

According to the press release, the “amendments are intended to promote efficiency, transparency, and operational resiliency by modernizing the manner in which information is submitted to the Commission and disclosed. Furthermore, publicly filed electronic submissions would be more readily accessible to the public and would be available on our website in easily searchable formats, which benefits both investors and the broader public.” The press release also pointed out that electronic filings have been effective in addressing logistical problems associated with COVID-19 and would help the SEC and filers “to effectively navigate any future disruptive events.”

As discussed in the fact sheet and the proposal, currently, Rule 101(b) permits, but does not require, electronic submission on EDGAR of a small number of documents. Among other things, the proposed rule and form amendments would:

• mandate electronic filing or submission of most of the documents that are currently permitted electronic submissions under Rule 101(b);
• mandate electronic submission in PDF format of the glossy annual report to security holders;
• mandate electronic filing of the certification made under Section 12(d) and Rule 12d1-3 that a security has been approved by an exchange for listing and registration;
• mandate the use of Inline XBRL for the filing of the financial statements and accompanying notes required by Form 11-K; and
• permit electronic submission in PDF format of certain foreign language documents.

As you know, under Exchange Act Rule 14a-3(c) and Rule 14c-3(b), companies are required to mail to the SEC, “solely for its information,” seven copies of their glossy annual reports sent to shareholders. Section 15(d) companies are subject to a similar requirement (only four copies) under Form 10-K.  In 2016, in a CDI, Corp Fin took the position that a company could satisfy these requirements by posting “an electronic version of its annual report to its corporate web site by the dates specified in Rule 14a-3(c), Rule 14c-3(b) and Form 10-K respectively, in lieu of mailing paper copies or submitting it on EDGAR. If the report remains accessible for at least one year after posting, the staff will consider it available for its information.”  (See this PubCo post.)  If adopted, the proposed amendments would supersede the 2016 staff guidance. The SEC believes that submission of the glossy annual report on EDGAR would help inform the SEC and benefit investors by allowing easy access to electronic copies.

Note that Rule 144 filings are not included as part of this proposal. That’s because mandatory electronic filing of Forms 144 are the subject of a separate proposal (see this PubCo post).  The SEC notes, however, that, if this proposal to update the electronic filing requirements is adopted, the SEC “may consider adopting the proposed Form 144 electronic filing requirements at the same time.” The SEC observed that, in 2019 and 2020, it received over 31,000 and 34,000 Form 144 filings, respectively. Of these submissions, only 221 filings in 2019 and 204 filings in 2020 were made electronically. 

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