SEC requires more paper forms to be filed electronically

The Securities and Exchange Commission is requiring some financial forms that currently are allowed to be filed or submitted in paper format to be filed or submitted electronically. 

The SEC adopted a set of amendments last week to require structured data reporting and remove some of the outdated references for some of its forms. The amendments aim to promote efficiency, transparency and operational resiliency by modernizing how information is filed or submitted to the SEC and disclosed to the public. The goal is also to help investors and the public by making electronic filings more easily accessible to the public and available on the SEC website in easily searchable formats.

“I am pleased to support these amendments because they will modernize and increase the efficiency of the filing process — for filers, investors and the SEC,” said SEC Chair Gary Gensler in a statement Friday. “In a digital age, it’s important for investors to have easy, online access to material information, rather than needing to visit SEC facilities to access that information. This is particularly important during COVID-19, which has made in-person visits to access these filings even more challenging. Even when access to physical copies isn’t restricted, there are other costs associated with paper filings. It costs investors money and time to travel to the SEC’s reading room. It costs the SEC money and time to process paper filings. These amendments will reduce costs and drive more efficiencies for investors, filers and the SEC.”

Evelyn Hockstein/Bloomberg

In some cases, the amendments require the use of Inline XBRL (Extensible Business Reporting Language) to be used, a data-tagging format that is already widely in use for many financial filings.

The SEC noted that electronic filing capabilities have helped address logistical and operational issues raised by the spread of COVID-19. Expanding electronic submission will allow the Commission and filers to navigate more effectively any future disruptive events that make the paper submission process unnecessarily burdensome, impractical, or unavailable.

The amendments will take effect 30 days after publication in the Federal Register. The SEC is providing the following transition periods to provide filers with adequate time to prepare to submit these documents electronically in accordance with the EDGAR Filer Manual, including applying for the necessary filer codes on EDGAR:

• Six months after the effective date of the amendments for filers to submit their “glossy” annual reports to security holders electronically in accordance with the EDGAR Filer Manual and, other than for Form 144, for paper filers who would be first-time electronic filers;
•  Six months after the date of publication in the Federal Register of the Commission release that adopts the version of the EDGAR Filer Manual addressing updates to Form 144 for filing Form 144 electronically on EDGAR; and
• Three years after the effective date of the amendments for filers to submit the financial statements and accompanying schedules to the financial statements required by Form 11-K in the Inline XBRL structured data language.

The SEC noted in an accompanying fact sheet that  the amended rules would promote more efficient storage, retrieval and analysis of documents compared to a paper submission and modernize the way in which information is submitted to the SEC. The amended rules also will improve the SEC’s ability to track and process filings and modernize the SEC’s records management process.

The SEC provided further details on specific forms:

The amended rules apply to various issuers, affiliates and national securities exchanges that file or submit reports to the SEC and will require the electronic filing or submission of:

• Documents that currently are permitted to be submitted electronically under Rule 101(b) of Regulation S-T, including notices of exempt solicitations and exempt preliminary roll-up communications, the “glossy” annual report to security holders, Form 144 for sales of securities of issuers subject to the reporting requirements of Section 13 or 15(d) of the Exchange Act, filings on Form 6-K, and filings made by multilateral development banks;
• Certifications made according to Section 12(d) of the Exchange Act and Exchange Act Rule 12d1-3 that a security has been approved by an exchange for listing and registration; and
• Certain foreign language documents.

The SEC adopted rules and form amendments to:

• Mandate the electronic filing or submission of certain documents that currently are allowed to be filed or submitted in paper; and
• Mandate the use of Inline XBRL for filing the financial statements and accompanying schedules to the financial statements required by Form 11-K.

The amended rules also will require the use of Inline XBRL for filing financial statements and accompanying notes to the financial statements required by Form 11-K and make several technical updates to Form F-10, Form F-X and Form CB to get rid of some outdated references.