On March 1, 2017, the SEC adopted final rules requiring companies to begin including hyperlinks to each document listed in exhibit indices to registration statements and reports filed with the Commission. The new requirement takes effect on September 1, 2017 or, in the case of non-accelerated filers or smaller reporting companies that submit filings in ASCII, September 1, 2018. This means all companies will need to submit covered filings in HTML format, as the ASCII format does not support functional hyperlinks. Other filings, such as proxy statements, can continue to be submitted in ASCII. However, as the SEC observed that few companies still utilize ASCII, this distinction will not affect the vast majority of filers.
The new requirement is intended to relieve investors and other users from the time consuming and cumbersome process of searching through filings to locate the relevant exhibit. Commenters overwhelmingly supported the proposal, and the SEC encourages early compliance.
Covered Filings. Filings covered by the requirement include Forms S-1, S-3, S-4, S-8, S-11, F-1, F-3, F-4, F-10, SF-1 and SF-3 under the Securities Act of 1933 and Forms 10, 10-K, 10-Q, 10-D, 8-K and 20-F under the Securities Exchange Act of 1934, with a phase-in period for certain filings on Form 10-D that require hyperlinks to exhibits filed with Form ABS-EE.
The requirement will apply to each filing, including pre-effective amendments to registration statements. In the case of exhibits filed for the first time, the hyperlink would represent a link to the exhibit itself, rather than to a previously filed document being incorporated by reference.
As amended, SEC rules now specify that the exhibit index must appear before the signature page of electronic filings.
The following exhibits are not covered by the new requirement for the hyperlink:
- Exhibits filed in paper pursuant to a temporary or continuing hardship exemption under Regulation S-T or exhibits incorporated by reference that were filed on paper before EDGAR filing became mandatory and have not been refiled electronically.
- Paper filings would need to be designated with the letter “P” in the exhibit index, along with another code, such as “Rule 311,” “TH” or “CH,” depending on the basis for the exemption.
- An electronic confirming copy of an exhibit filed pursuant to a hardship exemption would be designated “CE”;
- XBRL exhibits;
- Exhibits filed with Form ABS-EE; and
- Exhibits filed in other forms under the multi-jurisdictional disclosure system by Canadian issuers or in Form 6-K.
The SEC plans to issue an updated EDGAR manual that will describe the procedures needed to create a hyperlink to a previously filed exhibit and those needed to create a link to a concurrently filed exhibit.
Correcting Errors. If an inaccurate exhibit hyperlink is discovered, the company will be required to correct it:
- in the next Exchange Act periodic report that requires, or includes, an exhibit pursuant to Item 601 (or in the case of a foreign private issuer, pursuant to Form 20-F or Form F-10), in the case of an Exchange Act report or a registration statement that is effective, or
- by filing a pre-effective amendment, in the case of a registration statement that is not yet effective.
Liability. In the adopting release, the SEC assured companies that an inaccurate hyperlink would not, by itself, render the filing materially deficient or affect a company’s ability to use short-form registration statements, such as Form S-3. It also observed that EDGAR does not accept documents containing web addresses that hyperlink to external websites. As a result, the SEC does not believe there is any basis for concern in EDGAR filings for word processing programs that automatically create hyperlinks from references to websites. However, Rule 105(c) of Regulation S-T provides:
“If a filer includes an external hyperlink within a filed document, the information contained in the linked material will not be considered part of the document for determining compliance with reporting obligations, but the inclusion of the link will cause the filer to be subject to the civil liability and antifraud provisions of the federal securities laws with reference to the information contained in the linked material.”