SEC Speaks on Graphics, Multimedia in Filings

When we recently wrote about ways that companies can improve their disclosures to the Securities and Exchange Commission, a common suggestion for both clarity and brevity was to use charts, graphs, and other illustrations. A concern, however, is whether the information contained in those graphics must be searchable by the SEC’s electronic filing system or include accompanying text that is.

A new Compliance and Disclosure Interpretation by the SEC’s Division of Corporation Finance addresses that very issue regarding “graphic, image, audio, and video material” and the question, “May a Commission filing contain graphics (such as .gif or .jpeg image files) that include information that is not text-searchable?”

The CD&I references Regulation S-T, the rules governing electronic filings. It specified that “filers may not present in a graphic or image file information such as text or tables that users must be able to search and/or download into spreadsheet form (e.g., financial statements); filers must present such material as text in an ASCII document or as text or an HTML table in an HTML document.”

“We recognize that registrants may present information in Commission filings in formats such as bar graphs or other graphics that are not text-searchable but that they believe may be more useful to readers than tables or paragraphs that present the same information in searchable form,” the CD&I says. “We welcome the use of graphic and image files to make information more accessible for users, provided that the filing complies with applicable EDGAR size and formatting requirements and the filer’s use of graphics does not interfere with a user’s ability to search required information.”

The guidance then adds that, regarding required disclosures, a filer may present required information using graphics that are not text-searchable and still be in compliance if they also present the same information as searchable text or in a searchable table within the filing. The searchable information could be included, for example, together with the related graphic in the filing or in an appendix to the filing. Any additional information that the filer chooses to include in the filing and that is not required to be disclosed may be presented graphically without a separate text-searchable presentation.