As part of the Securities and Exchange Commission's
Disclosure Effectiveness Initiative – the SEC's
comprehensive project to reevaluate disclosure requirements –
the SEC recently proposed new rules that would require SEC-registered
companies to use active hyperlinks to each exhibit listed in an
exhibit index included in a registration statement and periodic or
The purpose of the proposed rule is to make access to material
contracts and other documents that are filed as exhibits more
efficient for investors and others who may be interested in
reviewing an exhibit filing. Under current SEC rules, registrants
are permitted to incorporate by reference to a previously filed
registration statement or report that includes the actual
agreements or other documents listed in an exhibit index. The use
of incorporation by reference avoids the need to refile exhibits
with each registration statement or report that requires exhibits,
but in order to locate a copy of the incorporated document, one
needs to manually search through the list of the company's
EDGAR filings to find the filing with which the particular exhibit
was actually filed – a process that the SEC acknowledges is
"both time consuming and cumbersome."
The rules would apply to nearly all of the forms that are
required to include exhibits under Item 601 of Regulation S-K,
specifically registration statements filed under the Securities Act
of 1933 on Forms S-1, S-3, S-4, S-8, S-11, SF-1 and SF-3, as well
as the foreign private issuer forms F-1, F-3, F-4 and F-10; and
periodic reports filed under the Securities Exchange Act of 1934,
including Forms 10-K, 10-Q, 8-K and 10-D, as well as foreign
private issuer Form 20-F. The rules would exclude exhibits filed
with Form ABS-EE and any XBRL exhibits.
For periodic and current reports filed under the Exchange Act,
an active hyperlink to each exhibit listed in the exhibit index
would be required at the time the report is filed with the SEC. If
the filing is a registration statement, an active hyperlink to each
exhibit listed in the exhibit index would not be required in each
amendment to a registration statement at the time it was filed, but
only in the version of the registration statement that is declared
effective by the SEC. For automatically effective registration
statements, active hyperlinks would need to be included at the time
the registration statement was filed with the SEC.
The rule also would require that all registration statements and
periodic and current reports covered by this proposal be filed on
EDGAR and in HTML (Hyper Text Markup Language) format because ASCII
(American Standard Code for Information Interchange) format, which
is currently permitted, does not support hyperlink functionality.
This change is likely to only affect a small number of public
companies that use ASCII. According to the SEC, only 175
registrants of the 9,764 registrants that filed either a
registration statement or a report in 2015, made filings in
The rule proposal does not address any substantive changes to
the exhibit filing requirements of Item 601 of Regulation S-K
related to periodic reports, a topic that is addressed at length in
the SEC's Concept Release on the business and financial
disclosure requirements in Regulation S-K, issued in April 2016.
The Concept Release poses very broad questions seeking public input
to help the SEC decide whether the exhibit filing requirements
continue to provide investors with information important to making
informed investment and voting decisions.
Public comments on the hyperlink rule proposal are due 45 days
after date of publication in the Federal Register.
This article is presented for informational purposes only
and is not intended to constitute legal advice.
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