SEC Adopts Mandatory Exhibit Hyperlinks and HTML Format Rules

The SEC has adopted final rules that will require most registration statements filed under the Securities Act and most reports filed under the Exchange Act to include an active hyperlink to each exhibit listed in the exhibit index of the filing. The final rules apply to Securities Act registration statements and Exchange Act reports that are subject to the exhibit filing requirements under Item 601 of Regulation S‑K and to Forms F‑10 and 20‑F. This includes registration statements filed on Forms S‑1, S‑3, S‑4, S‑8 and S‑11 and reports filed on Forms 8‑K, 10‑K, 10‑Q, 10 and 10‑D. The final rules also apply to specified registration statements filed by foreign private issuers.^[1] In a change from the proposed rules, the exhibit hyperlink requirement will apply to the initial registration statement and each subsequent pre‑effective amendment filed with the SEC, rather than only to the final, effective amendment.

The final rules require hyperlinks in the exhibit index to exhibits as filed on the SEC EDGAR system at the time the registration statement or report is filed, regardless of whether or not the exhibit is incorporated by reference. This will require that the exhibit index include both internal links to exhibits filed with the registration statement or report as well as to exhibits that are incorporated by reference from another filing.

The final rules do not apply to exhibits that were filed in paper pursuant to a temporary or continuing hardship exemption under SEC rules or pursuant to Rule 311 of Regulation S‑T, although the final rules require specific notations to identify these exhibits and any confirming electronic copies of such exhibits. The final rules do not require companies to refile electronically any documents previously filed in paper, including organizational documents. The final rules also do not apply to XBRL exhibits or to exhibits filed with Form ABS‑EE because these exhibits are not incorporated by reference and are filed in unconverted code.

Requirement to Correct Nonfunctioning and Mistaken Hyperlinks. The final rules include a new instruction to Rule 105 of Regulation S‑T that requires filers to correct a nonfunctioning or mistaken hyperlink in the next Exchange Act periodic report that requires or includes an exhibit pursuant to Item 601 of Regulation S‑K (or pursuant to Form 20‑F or F‑10), in the case of an Exchange Act report or an effective registration statement, or in a pre‑effective amendment to a registration statement in the case of a registration statement that is not yet effective under the Securities Act. The final rules also permit filers to correct an inaccurate or nonfunctioning hyperlink in a registration statement that has previously become effective by filing a post‑effective amendment to the registration statement. The adopting release states that an inaccurate hyperlink alone will not render the filing materially deficient, nor affect the filer’s eligibility to use short‑form registration statements.

Transitional Relief for Certain ASCII Filers. Because registration statements and reports filed in ASCII (text) format cannot support active hyperlinks, the final rules require that all filings that are subject to the final rules must be filed in HTML format. The adopting release states that less than 2% of SEC filings that will be subject to the final rules are currently filed in ASCII format. The final rules permit filers to continue to file any schedules or forms that are not subject to the exhibit filing requirements under Item 601 of Regulation S‑K, such as proxy statements, or other documents included with a filing (such as an exhibit), in ASCII format.

Compliance Date. The effective date of the final rules is September 1, 2017, which is also the compliance date for most filers. The adopting release says that the SEC encourages early compliance with the final rules. Filers that qualify as smaller reporting companies or non‑accelerated filers under SEC rules will not be required to comply with the final rules for filings submitted in ASCII format until September 1, 2018. The compliance date for any Form 10‑D filing that requires a hyperlink to an exhibit filed with Form ABS‑EE will be delayed until SEC staff completes programming changes to the EDGAR system that will allow filers to include the Form 10‑D and Form ABS‑EE in a single submission so that the required exhibit hyperlinks can be created at the time the Form 10‑D is filed.

Impact on Filers. Current SEC rules first adopted in 2000 permit filers to submit electronic filings in HTML format and permit the use of hyperlinks in SEC filings to allow filers to hyperlink to other documents within the same filing or to documents contained in other filings in the SEC’s EDGAR database. However, current SEC rules have continued to permit companies to file registration statements and reports in ASCII format, and do not require hyperlinks to other documents. The primary impacts of the final rules will be:

• Exhibit Hyperlinks. All companies will be required to file most Securities Act registration statements and most Exchange Act reports with hyperlinks to the relevant exhibit filing in that filing or elsewhere in the SEC’s EDGAR database. This will involve identifying and including hyperlinks to the relevant exhibits for the first filing that incorporates an exhibit by reference. Companies should consider modifying their disclosure controls and procedures to provide validation of these hyperlinks, and correction when required. Companies that file their registration statements and reports directly, rather than through a third party such as a financial printer, will want to ensure that their systems and software will permit them to include the required hyperlinks in their filings.
• HTML Filings. Companies that currently file registration statements and reports in ASCII format will, in addition to the actions required to comply with the exhibit hyperlinks requirement, need to take action to convert their filing process to HTML format no later than the applicable compliance date. 

^[1] These include Securities Act registration statements filed on Forms F‑1, F‑3, F‑4, SF‑1 and SF‑3.