SEC’s Office of the Investor Advocate to Hold Evidence Summit, Launch Investor Research Initiative

The Securities and Exchange Commission’s Office of the Investor Advocate today announced it will host an Evidence Summit to discuss strategies for raising retail investors’ understanding of key investment characteristics such as fees, risks, returns, and conflicts of interest.

The March 10 Evidence Summit will mark the official launch of the SEC’s new investor research initiative led by the SEC’s Office of the Investor Advocate, dubbed ‘POSITIER’, also known as Policy Oriented Stakeholder and Investor Testing for Innovative and Effective Regulation.

POSITIER seeks to inform the rulemaking process with evidence obtained from surveys and specific testing projects. Under this initiative, the SEC’s Office of the Investor Advocate has launched a specific study program to examine the topic of Retail Disclosure Effectiveness. This study program seeks to identify and test interventions that increase investor awareness of key investment features and, in turn, improve investment outcomes. 

“I am excited about the launch of POSITIER,” said Investor Advocate Rick Fleming, “because it has the potential to make a significant contribution to evidence-based policymaking at the Commission. With this new tool, we can gain better insights into the potential benefits to investors from proposed rule changes, and we will be able to help identify the best options amongst competing policy choices.”

Acting Chairman Michael Piwowar and Commissioner Kara Stein will speak at the event, as well as an interdisciplinary group of leading scholars in household and behavioral finance, psychology, marketing, and law. Although the focus will be on disclosure in the context of investment funds, the insights on improving the cognitive salience of information will be relevant to other financial disclosure contexts. 

The Evidence Summit will be held at the SEC’s Washington, D.C. headquarters on Friday, March 10, 2017 and will be open to the public and webcast live on the SEC’s website. The agenda is available at https://www.sec.gov/page/positier.

SEC Posts Notice of Availability of IFRS Taxonomy

The Securities and Exchange Commission today published a taxonomy on its website so that foreign private issuers that prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) may submit those reports using XBRL. XBRL is a machine readable data format that allows investors and other data users to more easily access, analyze and compare financial information across reporting periods and across companies.

Foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the International Accounting Standards Board may begin immediately to submit their financial statements in XBRL.  Otherwise, all such foreign private issuers must submit their financial statements in XBRL for fiscal periods ending on or after December 15, 2017.

“Foreign private issuers will use the published IFRS Taxonomy for IFRS financial statements, which will enable the public to take advantage of enhanced data analysis of those financial statements, as they already can with financial statements of issuers that prepare their financial statements in accordance with U.S. accounting standards,” said Acting Chairman Michael Piwowar.

In 2009, the Commission adopted requirements for structuring certain foreign private issuer financial statements in XBRL once an IFRS taxonomy was specified on the Commission’s website, SEC.gov. 

SEC Proposes Rule Amendments to Improve Municipal Securities Disclosures

The Securities and Exchange Commission today voted to propose rule amendments to improve investor protection and enhance transparency in the municipal securities market. 

Rule 15c2-12 under the Securities Exchange Act of 1934 requires brokers, dealers, and municipal securities dealers that are acting as underwriters in primary offerings of municipal securities subject to the Rule, to reasonably determine, among other things, that the issuer or obligated person has agreed to provide to the Municipal Securities Rulemaking Board (MSRB) timely notice of certain events.  The amendments proposed by the SEC today would add two new event notices:

– Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material; and

– Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties.

“Today the SEC took steps to empower investors by improving their access to current information about the financial obligations incurred by municipal issuers and conduit borrowers,” said SEC Acting Chairman Michael S. Piwowar.

These proposed amendments would provide timely access to important information regarding certain financial obligations incurred by issuers and obligated persons that could impact such entities’ liquidity and overall creditworthiness. 

The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Action

The Commission will consider whether to propose amendments designed to better inform investors and other market participants about the current financial condition of issuers of municipal securities and obligated persons.  Specifically, the proposed amendments would facilitate timely access to important information regarding certain financial obligations incurred by issuers and obligated persons, which could impact an issuer’s or obligated person’s liquidity and overall creditworthiness and create risks for existing security holders.  

Highlights

The proposed amendments to Exchange Act Rule 15c2-12 would amend the list of event notices that a broker, dealer, or municipal securities dealer acting as an underwriter in a primary offering of municipal securities subject to the Rule must reasonably determine that an issuer or obligated person has undertaken, in a written agreement for the benefit of holders of municipal securities, to provide to the Municipal Securities Rulemaking Board within ten business days of the event’s occurrence.

Specifically, the proposed amendments would add two new events to the list included in the Rule:

• Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material and
   
• Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties

The proposed amendments also would set forth a definition for the term “financial obligation.”

Background

Adopted in 1989, Rule 15c2-12 is designed to address fraud and manipulation in the municipal securities market by prohibiting the underwriting of municipal securities and subsequent recommendation of those municipal securities by brokers, dealers, and municipal securities dealers for which adequate information is not available. 

What’s Next

The Commission will seek public comment on the proposed amendments to Rule 15c2-12 for 60 days following publication in the Federal Register.

SEC Proposes Inline XBRL Filing of Tagged Data

The Securities and Exchange Commission today voted to propose amendments intended to improve the quality and accessibility of data submitted by public companies and mutual funds using eXtensible Business Reporting Language (XBRL). 

The proposals would require the use of Inline XBRL, which has the potential to benefit investors and other market participants while decreasing, over time, the cost of preparing information for submission to the SEC.  The recommendations are part of the SEC’s disclosure modernization initiative.

“While XBRL technology has made disclosures easier to access for investors, there are legitimate concerns about the burdens smaller companies face when preparing their filings,” said SEC Acting Chairman Michael Piwowar. “Today, the SEC is asking comment on a way to streamline this process to ensure usability for the public while keeping compliance costs down.”

The SEC will seek public comment on the proposed rules for 60 days.

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Highlights
The proposed amendments would require the use of Inline XBRL format for the submission of operating company financial statement information and mutual fund risk/return summaries.  The proposal would also eliminate the requirement for filers to post XBRL data on their websites. 

Among additional potential benefits:

• Inline XBRL allows filers to embed XBRL data directly into their filings instead of as attachments, reducing the likelihood of inconsistencies.
• Inline XBRL would give the preparer full control over the presentation of XBRL disclosures within the HTML filing.  In addition, tools like the open source Inline XBRL Viewer on SEC.gov can be used to review the XBRL data more efficiently.
• For mutual funds, the proposed amendments would facilitate efficiencies in the filing process by permitting the concurrent submission of XBRL data files with certain post-effective amendment filings.  The proposed amendments also would improve the timeliness of the availability of risk/return summaries in XBRL by eliminating the current 15 business day filing period accorded to all filings containing risk/return summaries.
• Under the proposals, requirements for operating company financial statements would be phased in over a three-year period.  Requirements for mutual funds risk/return summaries would be phased in over a two-year period.

Background

In 2009, the Commission adopted rules requiring operating companies to provide financial statement information in registration statements and periodic and current reports in XBRL by submitting it to the Commission in an Interactive Data File as an exhibit to these filings and posting it on their corporate websites, if any. 

In 2009, the Commission also adopted rules requiring mutual funds to provide risk/return summaries in XBRL by submitting them to the Commission in Interactive Data Files as exhibits and posting them on their websites, if any. 

There is a wide range of users of XBRL data, including investors, financial analysts, economic research firms, data aggregators, academic researchers, filers, and Commission staff.  Machine-readable financial market data, including XBRL-formatted data, enhances the Commission’s rulemaking and market monitoring activities by allowing staff to efficiently analyze large quantities of information. 

SEC Approves Rules to Ease Investor Access to Exhibits in Company Filings

The Securities and Exchange Commission today voted to adopt rule and form amendments to make it easier for investors and other market participants to find and access exhibits in registration statements and periodic reports that were originally provided in previous filings. 

The amendments will require issuers to include a hyperlink to each exhibit in the filing’s exhibit index.  Currently, someone seeking to retrieve and access an exhibit that has been incorporated by reference must review the exhibit index to determine the filing in which the exhibit is included, and then must search through the registrant’s filings to locate the relevant filing. 

“As the SEC looks for new ways to modernize financial disclosures, one of the easiest things we can do is add hyperlinks that automatically direct users to additional information on our EDGAR system,” said SEC Acting Chairman Michael Piwowar. “We are so accustomed to clicking hyperlinks on basically every website we visit, this commonsense solution will make life simpler for a lot of people.”

The final rules will take effect on September 1, 2017. 

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Highlights

The amendments require registrants that file registration statements or reports subject to the exhibit requirements under Item 601 of Regulation S-K, or that file Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of these filings, and to submit such registration statements and reports on EDGAR in HyperText Markup Language (HTML) format.  

Specifically:

• Registrants will be required to include a hyperlink to each exhibit identified in the exhibit index, unless the exhibit is filed in paper pursuant to a temporary or continuing hardship exemption under Rules 201 or 202 of Regulation S-T, or pursuant to Rule 311 of Regulation S-T.  This requirement will apply to the forms for which exhibits are required under Item 601 of Regulation S-K as well as Forms F-10 and 20-F.  The final rules, however, will exclude exhibits that are filed with Form ABS-EE and exhibits filed in the eXtensive Business Reporting language (XBRL). 
• Registrants will be required to file in HTML format the registration statements and reports subject to the exhibit filing requirements under Item 601 of Regulation S-K, as well as Forms F-10 and 20-F, because the text-based American Standard Code for Information Interchange (ASCII) format cannot support functional hyperlinks. While the affected registration statements and reports will be required to be filed in HTML, registrants may continue to file in ASCII any schedules or forms that are not subject to the exhibit filing requirements under Item 601, such as proxy statements, or other documents included with a filing, such as an exhibit.

What’s Next

The final rules will provide a longer compliance date for non-accelerated filers and smaller reporting companies and for certain filings on Form 10-D.  Under the final rules:

• Non-accelerated filers and smaller reporting companies that submit filings in ASCII will not have to comply with the final rules until September 1, 2018.
• The compliance date for any Form 10-D filing that will require a hyperlink to an exhibit filed with Form ABS-EE will be delayed until SEC staff completes programming changes to EDGAR that will allow registrants to include the Form 10-D and Form ABS-EE in a single submission so that the required exhibit hyperlinks can be created at the time the Form 10-D is filed.  The SEC will publish a notice in the Federal Register and on the SEC website announcing the compliance date for those Form 10-D filings.

SEC Votes to Seek Public Input on Possible Change to Industry Guide 3

The Securities and Exchange Commission today voted to publish a request for public comment on disclosures called for by Industry Guide 3 – Statistical Disclosure by Bank Holding Companies.

Specifically, the Commission is soliciting public input on whether Guide 3 continues to elicit the information that investors need for informed investment and voting decisions.  The Commission also seeks comment on whether there are new types of disclosures about the activities of bank holding companies that investors would find important.

“As an agency designed to serve the American people, it is imperative to constantly look back on the SEC’s rules and engage the public on ways to improve,” said SEC Acting Chairman Michael Piwowar. “Today, we are asking for public comment on whether Industry Guide 3 continues to elicit the information that investors need for informed investment and voting decisions.”

The request for comment will be published on the SEC website and in the Federal Register.  The comment period will remain open for 60 days.

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Highlights

The request for comment seeks public input on statistical and other disclosures provided by bank holding company registrants.  Among other things, the request for comment covers:

• Existing disclosure guidance for bank holding companies called for by Guide 3, as well as other sources of disclosure for bank holding companies and other registrants in the financial services industry
• Potential improvements to the disclosure regime, which could include new disclosures, the elimination of duplicative or overlapping disclosures, or revisions to current disclosures
• The scope and applicability of Guide 3
• The effects of regulation on bank holding companies, including with regard to their operations, capital structures, dividend policies and treatment in bankruptcy

For each of these topics, the request for comment presents specific questions for public comment.

Background

Industry Guide 3 was first published in 1976 as a convenient reference to the statistical disclosures sought by the staff of the Division of Corporation Finance in registration statement and other disclosure documents filed by bank holding companies.  The financial services industry is dynamic and has changed dramatically since Guide 3 was first published.  Consequently, our disclosure guidance may not in all cases reflect recent industry developments or changes in accounting standards related to financial and other reporting requirements.

SEC Posts Notice of Availability of IFRS Taxonomy

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The Securities and Exchange Commission today published a taxonomy on its website so that foreign private issuers that prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) may submit those reports using XBRL. XBRL is a machine readable data format that allows investors and other data users to more easily access, analyze and compare financial information across reporting periods and across companies.

Foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB may begin immediately to submit their financial statements in XBRL.  Otherwise, all such foreign private issuers must submit their financial statements in XBRL for fiscal periods ending on or after December 15, 2017.

“Foreign private issuers will use the published IFRS Taxonomy for IFRS financial statements, which will enable the public to take advantage of enhanced data analysis of those financial statements, as they already can with financial statements of issuers that prepare their financial statements in accordance with U.S. accounting standards,” said Acting Chairman Michael Piwowar.

In 2009, the Commission adopted requirements for structuring certain foreign private issuer financial statements in XBRL once an IFRS taxonomy was specified on the Commission’s website, SEC.gov. 

SEC Posts Notice of Availability of IFRS Taxonomy

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The Securities and Exchange Commission today published a taxonomy on its website so that foreign private issuers that prepare their financial statements in accordance with International Financial Reporting Standards (IFRS) may submit those reports using XBRL. XBRL is a machine readable data format that allows investors and other data users to more easily access, analyze and compare financial information across reporting periods and across companies.

Foreign private issuers that prepare their financial statements in accordance with IFRS as issued by the IASB may begin immediately to submit their financial statements in XBRL.  Otherwise, all such foreign private issuers must submit their financial statements in XBRL for fiscal periods ending on or after December 15, 2017.

“Foreign private issuers will use the published IFRS Taxonomy for IFRS financial statements, which will enable the public to take advantage of enhanced data analysis of those financial statements, as they already can with financial statements of issuers that prepare their financial statements in accordance with U.S. accounting standards,” said Acting Chairman Michael Piwowar.

In 2009, the Commission adopted requirements for structuring certain foreign private issuer financial statements in XBRL once an IFRS taxonomy was specified on the Commission’s website, SEC.gov. 

SEC Proposes Rule Amendments to Improve Municipal Securities Disclosures

The Securities and Exchange Commission today voted to propose rule amendments to improve investor protection and enhance transparency in the municipal securities market. 

Rule 15c2-12 under the Securities Exchange Act of 1934 requires brokers, dealers, and municipal securities dealers that are acting as underwriters in primary offerings of municipal securities subject to the Rule, to reasonably determine, among other things, that the issuer or obligated person has agreed to provide to the Municipal Securities Rulemaking Board (MSRB) timely notice of certain events.  The amendments proposed by the SEC today would add two new event notices:

– Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material; and

– Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties.

“Today the SEC took steps to empower investors by improving their access to current information about the financial obligations incurred by municipal issuers and conduit borrowers,” said SEC Acting Chairman Michael S. Piwowar.

These proposed amendments would provide timely access to important information regarding certain financial obligations incurred by issuers and obligated persons that could impact such entities’ liquidity and overall creditworthiness. 

The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Action

The Commission will consider whether to propose amendments designed to better inform investors and other market participants about the current financial condition of issuers of municipal securities and obligated persons.  Specifically, the proposed amendments would facilitate timely access to important information regarding certain financial obligations incurred by issuers and obligated persons, which could impact an issuer’s or obligated person’s liquidity and overall creditworthiness and create risks for existing security holders.  

Highlights

The proposed amendments to Exchange Act Rule 15c2-12 would amend the list of event notices that a broker, dealer, or municipal securities dealer acting as an underwriter in a primary offering of municipal securities subject to the Rule must reasonably determine that an issuer or obligated person has undertaken, in a written agreement for the benefit of holders of municipal securities, to provide to the Municipal Securities Rulemaking Board within ten business days of the event’s occurrence.

Specifically, the proposed amendments would add two new events to the list included in the Rule:

• Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material and
   
• Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties

The proposed amendments also would set forth a definition for the term “financial obligation.”

Background

Adopted in 1989, Rule 15c2-12 is designed to address fraud and manipulation in the municipal securities market by prohibiting the underwriting of municipal securities and subsequent recommendation of those municipal securities by brokers, dealers, and municipal securities dealers for which adequate information is not available. 

What’s Next

The Commission will seek public comment on the proposed amendments to Rule 15c2-12 for 60 days following publication in the Federal Register.

SEC Proposes Rule Amendments to Improve Municipal Securities Disclosures

The Securities and Exchange Commission today voted to propose rule amendments to improve investor protection and enhance transparency in the municipal securities market. 

Rule 15c2-12 under the Securities Exchange Act of 1934 requires brokers, dealers, and municipal securities dealers that are acting as underwriters in primary offerings of municipal securities subject to the Rule, to reasonably determine, among other things, that the issuer or obligated person has agreed to provide to the Municipal Securities Rulemaking Board (MSRB) timely notice of certain events.  The amendments proposed by the SEC today would add two new event notices:

– Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material; and

– Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties.

“Today the SEC took steps to empower investors by improving their access to current information about the financial obligations incurred by municipal issuers and conduit borrowers,” said SEC Acting Chairman Michael S. Piwowar.

These proposed amendments would provide timely access to important information regarding certain financial obligations incurred by issuers and obligated persons that could impact such entities’ liquidity and overall creditworthiness. 

The public comment period will remain open for 60 days following publication of the proposing release in the Federal Register.

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Action

The Commission will consider whether to propose amendments designed to better inform investors and other market participants about the current financial condition of issuers of municipal securities and obligated persons.  Specifically, the proposed amendments would facilitate timely access to important information regarding certain financial obligations incurred by issuers and obligated persons, which could impact an issuer’s or obligated person’s liquidity and overall creditworthiness and create risks for existing security holders.  

Highlights

The proposed amendments to Exchange Act Rule 15c2-12 would amend the list of event notices that a broker, dealer, or municipal securities dealer acting as an underwriter in a primary offering of municipal securities subject to the Rule must reasonably determine that an issuer or obligated person has undertaken, in a written agreement for the benefit of holders of municipal securities, to provide to the Municipal Securities Rulemaking Board within ten business days of the event’s occurrence.

Specifically, the proposed amendments would add two new events to the list included in the Rule:

• Incurrence of a financial obligation of the issuer or obligated person, if material, or agreement to covenants, events of default, remedies, priority rights, or other similar terms of a financial obligation of the issuer or obligated person, any of which affect security holders, if material and
   
• Default, event of acceleration, termination event, modification of terms, or other similar events under the terms of the financial obligation of the issuer or obligated person, any of which reflect financial difficulties

The proposed amendments also would set forth a definition for the term “financial obligation.”

Background

Adopted in 1989, Rule 15c2-12 is designed to address fraud and manipulation in the municipal securities market by prohibiting the underwriting of municipal securities and subsequent recommendation of those municipal securities by brokers, dealers, and municipal securities dealers for which adequate information is not available. 

What’s Next

The Commission will seek public comment on the proposed amendments to Rule 15c2-12 for 60 days following publication in the Federal Register.

SEC Proposes Inline XBRL Filing of Tagged Data

The Securities and Exchange Commission today voted to propose amendments intended to improve the quality and accessibility of data submitted by public companies and mutual funds using eXtensible Business Reporting Language (XBRL). 

The proposals would require the use of Inline XBRL, which has the potential to benefit investors and other market participants while decreasing, over time, the cost of preparing information for submission to the SEC.  The recommendations are part of the SEC’s disclosure modernization initiative. 

“While XBRL technology has made disclosures easier to access for investors, there are legitimate concerns about the burdens smaller companies face when preparing their filings,” said SEC Acting Chairman Michael Piwowar. “Today, the SEC is asking comment on a way to streamline this process to ensure usability for the public while keeping compliance costs down.”

The SEC will seek public comment on the proposed rules for 60 days.

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Highlights

The proposed amendments would require the use of Inline XBRL format for the submission of operating company financial statement information and mutual fund risk/return summaries.  The proposal would also eliminate the requirement for filers to post XBRL data on their websites.  

Among additional potential benefits:

• Inline XBRL allows filers to embed XBRL data directly into their filings instead of as attachments, reducing the likelihood of inconsistencies.
• Inline XBRL would give the preparer full control over the presentation of XBRL disclosures within the HTML filing.  In addition, tools like the open source Inline XBRL Viewer on SEC.gov can be used to review the XBRL data more efficiently.
• For mutual funds, the proposed amendments would facilitate efficiencies in the filing process by permitting the concurrent submission of XBRL data files with certain post-effective amendment filings.  The proposed amendments also would improve the timeliness of the availability of risk/return summaries in XBRL by eliminating the current 15 business day filing period accorded to all filings containing risk/return summaries.
• Under the proposals, requirements for operating company financial statements would be phased in over a three-year period.  Requirements for mutual funds risk/return summaries would be phased in over a two-year period.

Background

In 2009, the Commission adopted rules requiring operating companies to provide financial statement information in registration statements and periodic and current reports in XBRL by submitting it to the Commission in an Interactive Data File as an exhibit to these filings and posting it on their corporate websites, if any. 

In 2009, the Commission also adopted rules requiring mutual funds to provide risk/return summaries in XBRL by submitting them to the Commission in Interactive Data Files as exhibits and posting them on their websites, if any. 

There is a wide range of users of XBRL data, including investors, financial analysts, economic research firms, data aggregators, academic researchers, filers, and Commission staff.  Machine-readable financial market data, including XBRL-formatted data, enhances the Commission’s rulemaking and market monitoring activities by allowing staff to efficiently analyze large quantities of information.

SEC Approves Rules to Ease Investor Access to Exhibits in Company Filings

The Securities and Exchange Commission today voted to adopt rule and form amendments to make it easier for investors and other market participants to find and access exhibits in registration statements and periodic reports that were originally provided in previous filings. 

The amendments will require issuers to include a hyperlink to each exhibit in the filing’s exhibit index.  Currently, someone seeking to retrieve and access an exhibit that has been incorporated by reference must review the exhibit index to determine the filing in which the exhibit is included, and then must search through the registrant’s filings to locate the relevant filing. 

“As the SEC looks for new ways to modernize financial disclosures, one of the easiest things we can do is add hyperlinks that automatically direct users to additional information on our EDGAR system,” said SEC Acting Chairman Michael Piwowar. “We are so accustomed to clicking hyperlinks on basically every website we visit, this commonsense solution will make life simpler for a lot of people.”

The final rules will take effect on September 1, 2017. 

*  *  *

FACT SHEET

SEC Open Meeting

March 1, 2017

Highlights

The amendments require registrants that file registration statements or reports subject to the exhibit requirements under Item 601 of Regulation S-K, or that file Forms F-10 or 20-F, to include a hyperlink to each exhibit listed in the exhibit index of these filings, and to submit such registration statements and reports on EDGAR in HyperText Markup Language (HTML) format.  

Specifically:

• Registrants will be required to include a hyperlink to each exhibit identified in the exhibit index, unless the exhibit is filed in paper pursuant to a temporary or continuing hardship exemption under Rules 201 or 202 of Regulation S-T, or pursuant to Rule 311 of Regulation S-T.  This requirement will apply to the forms for which exhibits are required under Item 601 of Regulation S-K as well as Forms F-10 and 20-F.  The final rules, however, will exclude exhibits that are filed with Form ABS-EE and exhibits filed in the eXtensive Business Reporting language (XBRL). 
• Registrants will be required to file in HTML format the registration statements and reports subject to the exhibit filing requirements under Item 601 of Regulation S-K, as well as Forms F-10 and 20-F, because the text-based American Standard Code for Information Interchange (ASCII) format cannot support functional hyperlinks. While the affected registration statements and reports will be required to be filed in HTML, registrants may continue to file in ASCII any schedules or forms that are not subject to the exhibit filing requirements under Item 601, such as proxy statements, or other documents included with a filing, such as an exhibit.

What’s Next

The final rules will provide a longer compliance date for non-accelerated filers and smaller reporting companies and for certain filings on Form 10-D.  Under the final rules:

• Non-accelerated filers and smaller reporting companies that submit filings in ASCII will not have to comply with the final rules until September 1, 2018.
• The compliance date for any Form 10-D filing that will require a hyperlink to an exhibit filed with Form ABS-EE will be delayed until SEC staff completes programming changes to EDGAR that will allow registrants to include the Form 10-D and Form ABS-EE in a single submission so that the required exhibit hyperlinks can be created at the time the Form 10-D is filed.  The SEC will publish a notice in the Federal Register and on the SEC website announcing the compliance date for those Form 10-D filings.