Corporate & Securities Blog

The U.S. Securities and Exchange Commission (“SEC”) has adopted new rules making it easier for investors to find exhibits to an issuer’s public filings. Currently, issuers submit electronic filings to the SEC using the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR”), which include exhibits that are incorporated by reference to earlier filings. Investors are therefore required to search through earlier filings in order to find these exhibits, such as material contracts, articles of incorporation, and other material documents. On March 1, 2017, the SEC issued a new rule that requires public companies to create hyperlinks to the exhibits that they file with most registration statements under the Securities Act and most reports filed under the Exchange Act.

The final rule applies to Securities Act registration statements and Exchange Act reports that are subject to the exhibit filing requirements under Item 601 of Regulation S-K and to Forms F-10 and 20-F. The exhibit hyperlink requirement will also apply to the initial registration statement and each subsequent pre-effective amendment filed with the SEC, rather than only to the final, effective amendment. The new rule exempts companies that file XBRL exhibits and exhibits filed in paper format pursuant to a temporary or continuing hardship exemption.

The hyperlink must be to officially filed documents within the current submission or to documents previously filed electronically and located in the EDGAR database. EDGAR does not accept documents containing web addresses that hyperlink to external websites. The SEC is not requiring registrants to re-file electronically any documents in paper format, including organizational documents, despite the importance of such documents to investors. The adopting release states that an inaccurate hyperlink alone with not render the filing materially deficient, nor affect the filer’s eligibility to use short-form registration statements.

SEC registrants must begin complying with the new requirements in SEC filings submitted on or after September 1, 2017. A registrant that is a smaller reporting company or a non-accelerated filer does not need to comply with the new requirements until September 1, 2018. Companies should consider modifying their disclosure controls and procedures to provide validation of these hyperlinks, and correction when required. Companies that file their registration statements and reports directly, rather than through a third party such as a financial printer, will want to ensure that their systems and software will permit them to include the required hyperlinks in their filings.