SEC Hyperlink Rules Are Live
By Jeffrey Alpert, Associate, Corporate and Finance
Effective September 1, 2017, the Securities and Exchange Commission’s (SEC) recently adopted rules require most companies that file public reports to include active hyperlinks to each exhibit listed in the exhibit index, as well as exhibits incorporated by reference, included in registration statements, periodic reports and current reports filed by such reporting entities. Nonaccelerated filers and smaller reporting companies that submit filings in ASCII will not have to comply with the final rules until September 1, 2018.
The rules apply to 1933 Act & 1934 Act reports and registration statements that are subject to the exhibit filing requirements under Item 601 of Regulation S-K. Affected SEC forms include reports filed on Forms 8-K, 10-K and 10-Q and registration statements filed on Forms S-1, S-3, S-4, S-8 and S-11. Importantly, the rules do not require hyperlinks for XBRL exhibits.
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. Draft registration statements submitted confidentially, however, do not need to include hyperlinks to the exhibits.
The SEC has noted that where a filing contains an inaccurate exhibit hyperlink, the inaccurate hyperlink alone will not render the filing materially deficient, nor affect a company’s eligibility to use short-form registration statements. But any such inaccuracies must be remedied. 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 filer must correct the hyperlink in the next periodic report that requires or includes an exhibit.
What to Do Now:
Reporting companies must be prepared to hyperlink for new filings, and should promptly begin to review their last Annual Report on Form 10-K, which contains the most comprehensive exhibit requirements for any periodic report, so that the process for hyperlinking will be smooth when their next Form 10-K is due. Note that filers do not need to insert hyperlinks into registration statements and reports that were filed prior to September 1, 2017, but they will need to insert hyperlinks to such filings whenever they incorporate by reference pre-September 1, 2017, exhibits.
To ensure compliance with the new rules, filers should take the following steps:
- For filers who do not prepare EDGAR filings in-house, contact your financial printer or other filer service to coordinate the mechanics for including hyperlinks in your SEC reports and registration statements;
- For filers who handle EDGAR filings in-house, review the technical requirements of the EDGAR Filer Manual and ensure that internal systems function properly to include functioning hyperlinks consistent with EDGAR requirements;
- Review the exhibit index of the most recently filed Form 10-K with a view to deciding which exhibits will need to be hyperlinked in the next Form 10-K filing, and to ensure that all citations to documents incorporated by reference are correct and complete; and
- Update your disclosure controls and procedures to incorporate this step into your standard filing process.
A copy of the SEC adopting release for the final rules is available here, and a copy of the accompanying SEC press release is available here.
If you have any questions about how to successfully navigate the new requirements, including how they may apply based on your filing status, or if you would like Manatt’s team to assist you with a comprehensive review of past exhibit filings to ensure correct citation of documents, please contact the Manatt lawyer with whom you usually work, or