SEC adopts amendments to require glossy annual reports, Forms 144 to be filed electronically

By John Filar Atwood

The SEC voted unanimously to adopt rule amendments that will require 10 documents, including the “glossy” annual report and Forms 144, to be filed electronically through the EDGAR system. The Commission also agreed to mandate the use of inline eXtensible Business Reporting Language (inline XBRL) for filing financial statements and the accompanying schedules to the financial statements required by Form 11-K (Updating EDGAR Filing Requirements and Form 144 Filings, Release No. 33-11070, June 2, 2022).

Citing Form 144 as a prime example, Chair Gary Gensler said that the amendments will make the filing process more efficient and cost-effective. He noted that in 2021 more than half of the 30,000 Forms 144 received by the Commission were filed on paper. Those will now have to be filed electronically, a change that will result in easier access for investors and will reduce processing costs for both filers and the SEC, he said.

The SEC pointed out that electronic filing capabilities have helped address logistical and operational issues raised by the spread of COVID-19. By expanding electronic submissions through the new amendments, the agency believes that filers will be able to more easily navigate any future disruptive events that make the paper submission process unavailable or impractical.

Mandated electronic filing. In all, the amendments mandate the electronic filing of ten documents. They are:

• “glossy” annual reports,
• Form 6–K (foreign private issuers),
• notices of exempt solicitation,
• notices of exempt preliminary roll-up communications,
• Form 11–K (employee benefit plans),
• filings made by multilateral development banks,
• certifications of approval of exchange listing,
• Form 144 for reporting issuers,
• certain foreign language documents, and
• documents filed pursuant to Investment Company Act Section 33.

The Commission is providing a transition period for compliance with the new requirements to give filers time to prepare to submit the documents electronically in accordance with the EDGAR Filer Manual, including applying for the necessary filer codes. The compliance date is six months after the effective date of the amendments for filers to submit their “glossy” annual reports electronically in accordance with the EDGAR Filer Manual and, other than for Form 144, for paper filers who would be first-time electronic filers. For Form 144, the compliance date is six months after the date of publication in the Federal Register of the Commission release that adopts the version of the EDGAR Filer Manual addressing updates to Form 144 for filing Form 144 electronically on EDGAR.

Form 11-K requirements. The amended rules will require the use of inline XBRL for the filing of the financial statements and accompanying notes to the financial statements required by Form 11-K. The SEC also voted to make certain technical updates to Form F-10, Form F-X, and Form CB to remove outdated references.

According to the SEC’s fact sheet, the compliance date for structured data reporting for Form 11-K is three years after the effective date of the rule amendments. The Commission believes this will give registrants time to transition to a structured data language enabling filings that are both human-readable and machine-readable.

The release is No. 33-11070.