On August 31, 2016, the Securities and Exchange Commission proposed amendments to require the inclusion of hyperlinks to the exhibits in registration statements and periodic and current reports. Additionally, these types of filings would be required to be made in HyperText Markup Language (HTML) on EDGAR. The proposed hyperlink requirement could make reviewing filings vastly easier for readers with relatively little additional effort required by filers. The proposed amendments come on the heels of the staff’s expansive review of Regulation S-K, with an eye to making disclosure more efficient and comprehensive. The public comment period will be open for 45 days following publication in the Federal Register.
Which forms would be impacted?
Nearly all forms that require exhibits under Regulation S-K Item 601 would be impacted by the proposed amendments. Registration statements and period and current reports that require exhibits pursuant to Regulation S-K Item 601 would be impacted, as well as filings on Forms F-10 and 20-F. Forms requiring exhibits pursuant to Regulation S-K Item 601 include Forms S-1, S-3, S-4, S-8, S-11, F-1, F-3, F-4, SF-1 and SF-3 as well as Forms 10, 10-K, 10-Q, 8-K and 10-D. The proposed amendments would also impact Rules 11, 102 and 105 of Regulation S-T.
The proposed hyperlink amendments would not impact copies of the forms included on the filer’s own website.
Which exhibits would have to be linked?
Filers would be required to include a live hyperlink to each exhibit identified in the exhibit index of a relevant filing. For registration statements, the hyperlinks would only be required in the versions that become effective (including post-effective amendments).
Why HTML format?
Currently, filers may choose to use either ASCII or HTML when filing on EDGAR. However, only the HTML format supports the proposed hyperlinks. Although over 99% of filings made in 2015 were in HTML1 , of those made in ASCII, 74% were made by smaller reporting companies and non-accelerated filers.2 Accordingly, the new HTML requirement may have a disproportionate impact on smaller filers.
What about exhibits filed on paper?
If an exhibit was filed on paper due to a hardship exemption, a hyperlink would not be required. The release proposes an instruction.
If an exhibit was filed on paper before electronic fling on EDGAR was required, a hyperlink would not be required.3 The staff has asked for comments specifically addressing whether such paper filings should be refiled and hyperlinked.
Are there any exceptions?
Form ABS-EE and XBRL exhibits are proposed to be excluded because they are in unconverted code and are not incorporated by reference into other filings. Revisions to Form 6-K for foreign private issuers and certain other Multijurisdictional Disclosure System forms are not currently proposed given that all exhibits filed with those forms are attached thereto.
What should filers do now?
Filers may want to consider marking comments to the proposed rules, especially if they expect the proposed rules will be unduly burdensome. Filers should also build time into their schedules for the preparation of future filings to account for the possibility of having to provide live hyperlinks. The rule is unlikely to go into effect until 2017 at the earliest.