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SEC’s requirement for hyperlinks in filings now in effect

Joe Mont | September 1, 2017

The arrival of September brings with it new requirements regarding the use of hyperlinks in public company filings made to the Securities and Exchange Commission.

In March 1, the SEC voted to adopt rule and form amendments intended 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, effective as of Sept. 1, will require issuers to include a hyperlink to each exhibit in the filing’s exhibit index.  Previously, 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,” Commissioner Michael Piwowar said at the time, while serving as acting chairman. “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.”

Since the SEC’s implementation of the Electronic Data Gathering, Analysis, and Retrieval system (EDGAR) in 1984 to automate the receipt, processing, and dissemination of documents required to be filed under the federal securities laws,  there have been efforts to make the system more efficient and comprehensive. In 2000, the Commission adopted rule and form amendments that allowed registrants to file documents in the HTML format. It also expanded the permissible use of hyperlinks in EDGAR filings to allow filers to hyperlink to other documents within the same filing and to documents contained in other filings in the EDGAR database.

Additional EDGAR modernization efforts have emerged as a result of the Commission’s ongoing Disclosure Effectiveness Initiative, a comprehensive review of Regulation S-K requirements mandated by Congress in both the JOBS Act and FAST Act.

The now-effective 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 are 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.

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