This past spring, the SEC issued final rules designed to make it easier to access and retrieve exhibits to company filings through the use of hyperlinks. For most companies, this new requirement becomes effective for filings made on or after September 1, 2017, which means it’s time to be sure you are ready. (Smaller reporting companies and non-accelerated filers using ASCII format have until September 1, 2018 to comply.)
Item 601 of Regulation S-K, which requires companies to include an exhibit index that lists each exhibit included with the filing, now requires that each exhibit to Forms S-1, S-3, S-4 and S-8 (among others) under the Securities Act and Forms 10, 10-K, 10-Q and 8-K (among others) under the Exchange Act include an active hyperlink to the particular document on EDGAR. This applies whether or not the exhibit is incorporated by reference.
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 in the initial filing and in each amendment (pre-effective and post-effective) thereafter.
The new rules exclude a short list of filings, including among others:
- XBRL exhibits, and
- exhibits that were filed on paper before EDGAR filings became mandatory, have not been re-filed electronically and are incorporated by reference.
Companies must submit all affected registration statements and reports in HyperText Markup Language (HTML) format, which is not generally a problem since that is the format already used by almost everyone. One potential glitch arises, however, if your exhibit list includes an old document that was filed in American Standard Code for Information Interchange (ASCII) format as part of a single large document (which is how things were done in olden days). Absent express guidance from the SEC staff, your alternatives are to link back to the single document while specifically referencing the relevant exhibit contained therein or to re-file the exhibit with the current document.
In most cases, complying with the new hyperlink requirement will simply be a matter of adding the hyperlinking process to your filing checklist to be sure it is not forgotten and then leaving yourself enough time to get it done and verified through your normal disclosure controls and procedures. In particular, be sure to build in extra time for the long exhibit list in your first Form 10-K filed after September 1.
Also, if your company prepares and files its documents in-house, the responsible persons should review recently updated Volume II, Section 5.4.2 of the EDGAR Filer Manual (Version 42) for instructions on how to comply with the hyperlink requirement. If you use a financial printer, presumably they are already up to speed, although it wouldn’t hurt to ask.