We have prepared this memo to remind all clients that file public reports that, beginning September 1, 2017, the U.S. Securities and Exchange Commission (the “SEC”) will require companies filing registration statements and quarterly and annual reports subject to the exhibit requirements of Item 601 of Regulation S-K to include an active hyperlink to each exhibit listed in the exhibit index, whether or not the exhibit is incorporated by reference.1
This rule affects most filings made under the Securities Act of 1933, as amended (the “Securities Act”), and the Securities Exchange Act of 1934, as amended (the “Exchange Act”), including filings made on Forms S-1, S-3, S-4, S-8, S-11, SF-1, SF-3, F-1, F-3 and F-4 under the Securities Act and Forms 10, 10- K, 10-Q, 8-K and 10-D under the Exchange Act. The rule also requires companies filing on Forms F-10 and 20-F to include hyperlinks in their exhibit indexes. Noticeable exceptions from this rule include filings made under the multi-jurisdictional disclosure system used by certain Canadian issuers, filings made on Form 6-K by foreign private issuers and filings made using Form 40-F and Schedule TO. In addition, proxy statements, which are not subject to the exhibit requirements of Item 601 of Regulation S-K, are not subject to the rule.
For periodic and current reports, the rule requires filers to include an active hyperlink for each exhibit listed in the report at the time the report is first filed. For registration statements, the rule requires the inclusion of hyperlinks in the initial registration statement and each subsequent pre-effective amendment. However, draft registration statements submitted confidentially do not need to include hyperlinks to the exhibits.
All exhibits in a registration statement or report must be hyperlinked except XBRL exhibits and exhibits filed only on paper. Recognizing that companies may currently incorporate by reference to exhibits that have been filed only on paper, the SEC determined that the rules will not require companies to refile electronically exhibits that were previously filed only on paper, such as exhibits filed with the SEC before the implementation of EDGAR. Filings made using American Standard Code for Information Interchange (“ASCII”) contain the exhibits within the body of the main filing; as a result, when exhibits have previously been filed using ASCII, the hyperlink will be linked to the main filing rather than the specific exhibit referenced. Further, if a filer references multiple exhibits within one entry, the link will take the user to the SEC page for the filing rather than the specific exhibits referenced.
While the SEC has indicated that an inaccurate exhibit hyperlink alone will not render a filing materially deficient or affect a filer’s eligibility to use short-form registration statements, such inaccuracies must be remedied. Instruction 105 of Regulation S-T indicates that a filer must correct a nonfunctioning hyperlink or hyperlink to the wrong exhibit by filing, in the case of a registration statement that is not yet effective, a pre-effective amendment to such registration statement. For an effective registration statement or a periodic or current report, the registrant must correct the hyperlink in the next periodic report that requires or includes an exhibit pursuant to Item 601.
Given that the required date on which companies are required to comply is fast approaching, companies should inventory the exhibits included in their most recent annual report and confirm that the exhibit index is up-to-date and correctly cross-references prior filings that contain the applicable exhibits. In addition, companies should reach out to their EDGAR filing agents and procure their assistance in setting up the required hyperlinks.