On June 2, 2022, the United States Securities and Exchange Commission (“SEC”) adopted amendments to Exchange Act Rule 14a-3, Form 10-K and Regulation S-T, among others, which mandate that registrants electronically submit to the SEC the annual report to security holders required by Exchange Act Rule 14a-3(b).1 As the SEC notes in the Adopting Release, the annual report to security holders is often colloquially referred to as the “glossy” annual report. Pursuant to the new requirements, the glossy annual report must be submitted electronically in PDF format2 and in accordance with the EDGAR Filer Manual with each glossy annual report submission due no later than the date on which such report is first sent or given to security holders. The Adopting Release further provides that the glossy annual report should not be re-formatted, re-sized, or otherwise re-designed for purposes of submission on EDGAR.
Since 1967, the SEC has required registrants to furnish to the SEC, solely for its information, seven copies of the glossy annual report. Prior to the adoption of the amendments in the Adopting Release, registrants had the option to satisfy the submission requirement by submitting to the SEC their glossy annual report either in paper format (i.e., mail) or electronically on EDGAR. Practically, however, few registrants have been submitting their annual glossy reports to the SEC in either paper or electronic format because in 2016, the SEC staff published interpretative guidance that allowed registrants to satisfy their delivery obligations by posting the glossy annual report on their corporate website, provided the reports remained accessible for at least one year following the posting.3 Contemporaneously with the effectiveness of the amended rules, this interpretative guidance was withdrawn.
Importantly, the EDGAR submission of the glossy annual report will not be considered “filed” with the SEC, which is consistent with its status prior to the Adopting Release.
The SEC commented in the Adopting Release that it believes the requirement to furnish the glossy annual report in paper format is unnecessary. Rather, it believes EDGAR should serve as the repository for copies of the glossy annual report to security holders, whether or not a registrant decides to post the glossy annual report on its corporate website.
The new rule was effective July 11, 2022 and provides for a six-month transition period after this effective date. For calendar year reporting companies, the new requirement will be effective for 2023 annual meetings and related proxy statement filings.
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Notes:
1 Release Nos. 33-11070; and 34-95025 (the “Adopting Release”).
2 The SEC indicated in the Adopting Release that in the future, EDGAR may be upgraded to accommodate other formats appropriate for electronic filing of glossy annual reports. If so, the SEC will communicate the upgrade by updating the EDGAR Filer Manual.
3 In its Adopting Release, the SEC noted that in 2020 and 2021 it received a grand total of 23 and 18, respectively, electronic submissions of glossy annual reports and “minimal” paper submissions.
