Last week, the SEC proposed rule amendments that would require companies to include a hyperlink to each exhibit listed in the exhibit index of a registration statement, periodic report or current report. The new rules would make it quicker and easier to track down exhibits and are consistent with the SEC’s ongoing efforts to update EDGAR filings as technology changes.
Item 601 of Regulation S-K requires companies to include an exhibit index that lists each exhibit included with the filing. Of course, most exhibits listed in an index are incorporated by reference to prior filings. The staff notes that retrieving an exhibit incorporated by reference now requires first determining the filing in which the exhibit physically appeared and then searching through the company’s EDGAR filings to locate the relevant document. Anyone who has been through this exercise knows that it can be annoying and cumbersome, particularly for older documents.
The proposed amendments would apply to almost all forms required to include exhibits under Item 601, including Forms S-1, S-3, S-4 and S-8 under the Securities Act and Forms 10, 10-K, 10-Q and 8-K under the Exchange Act. The proposed rules would exclude any XBRL exhibits since they are in unconverted code and not incorporated by reference into other filings.
Under the proposed amendments, each exhibit must include an active hyperlink to the particular document. For periodic reports, an active hyperlink must be included for each exhibit listed when the report is filed. For registration statements, a hyperlink must be included only for exhibits listed in the version that becomes effective.
Finally, the proposed amendments also would require that companies submit all affected registration statements and reports in HyperText Markup Language (HTML) format, rather than American Standard Code for Information Interchange (ASCII) format, as is currently permitted. The SEC observes that the elimination of ASCII format filings would not be unduly burdensome since, in 2015, over 99% of the filings made on forms affected by the proposed amendments were filed in HTML.
The SEC has requested comments during a 45-day comment period. However, these amendments are unlikely to be controversial, and you should expect them to be final in short order.
All the best,