On August 19th, the SEC voted to overturn a rule exception that allowed a proposed national market system (NMS) plan fee amendment to become effective upon filing before review and comment by investors and other market participants. The fee exception contained in Rule 608(b)(3)(1) of Regulation NMS allowed a fee amendment to become effective immediately upon filing with the SEC, and an NMS plan could start charging the new fee before an opportunity for public comment and without SEC action. Also, Rule 608 did not include specific timelines for public notice and SEC action on NMS plan proposals. Continue reading "SEC Issues New Ruling to Ensure Public Notice,..." »

On August 24th, the SEC proposed a new rule to aid in its administration of EDGAR. This new rule (Regulation S-T Rule 15 under General Rules and Regulations for Electronic Filings) should allow the SEC to continue to promote the integrity and reliability of EDGAR submissions at a time when submissions to the system are rapidly increasing in volume.
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Version 5.4b of all applications in the GoFiler Suite has been released. This release contains additional protections and features to deal with the EDGAR system issues that are occurring for many filers. Additionally, this release has a new Tidy HTML function and new processing in XDX to override the presentation on which facts created by an engram will appear. There have also been a number of improvements to the general application to further improve the handling of large files or files with long lines and to reorganize tools on the Edit Ribbon.

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Market instability due to COVID-19 and the pandemic’s impact on normal business operations may have increased the risks associated with investing in the modern securities marketplace. The SEC’s Office of Compliance Inspections and Examinations (OCIE) has identified a number of COVID-19-related issues relevant to SEC-registered investment advisers and broker-dealers (“firms”) and has released a risk alert exploring these topics. The purpose of the risk alert is to share some of these observations with firms, investors, and the public.
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On August 5th, the SEC released procedures that create a staff-led process to nominate candidates for appointment to the Investor Advisory Committee. A nominating committee comprised of individuals from across the SEC’s divisions and offices will identify candidates for vacancies on the Investment Advisory Committee. Initially, this nominating committee will be chaired by Robert Marchman, Senior Policy Advisor for Diversity and Inclusion.
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Recently the SEC has been deploying significant technical upgrades to the EDGAR system. As a result, there have been unexpected performance issues which are inconveniencing filers. The SEC is aware of these issues and is working to resolve them.
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On August 5th, the SEC proposed comprehensive modifications to the mutual fund and exchange-traded fund disclosure framework. These funds are registered on Form N-1A (called “open-end funds”). The proposed disclosure framework would feature concise and visually engaging shareholder reports that would highlight pertinent information that retail investors use to monitor their fund investments. As a central component of the SEC’s investor experience initiative, the proposal responds to comments the SEC received in 2018 concerning retail investors’ experience with fund disclosure. Continue reading "SEC Proposes to Modernize Fund Shareholder..." »

Please be aware that there are two significant issues that are currently affecting filers: a) issues with HTML code generated by software other than GoFiler that can result in data loss if the HTML code contains no line returns; and b) SEC changes to the EDGAR system that are affecting the filing and acceptance response time and performance. The first issue has been addressed in a hotfix for GoFiler, which you can download and install by following the instructions in this notice. The second is not a problem with GoFiler but rather a general problem with the SEC changes to the EDGAR system. More information on that is also available in this notice.

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The ongoing COVID-19 pandemic has highlighted the importance of access to capital for small businesses across the country. The Small Business Capital Formation Advisory Committee recently met to discuss and develop solutions that can support small business’ short- and long-term capital needs. The SEC responded to the Committee’s feedback with temporary emergency relief to expedite the offering process for smaller, established companies. Continue reading "Small Business Capital Formation Advisory..." »

The SEC’s Division of Economic and Risk Analysis (DERA) recently released its analysis of custom tag usage in financial filings submitted to the SEC. The analysis covered XBRL financial data submitted with Forms 20-F, 20-F/A, 40-F and 40-F/A from January 2017 to December 2019 by filers preparing their reports using International Financial Reporting Standards (IFRS), which is issued by the International Accounting Standards Board. The analysis focused on trends in filers’ use of custom tags in their XBRL financial data for these forms during the last three years in two categories: 1) Financial statements (F/S) only and 2) F/S and notes.
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On July 24th, the SEC and the Federal Deposit Insurance Corporation (FDIC) adopted a final rule required by the Dodd-Frank Act that clarifies and implements provisions relating to the orderly liquidation of certain brokers or dealers (covered broker-dealers) in the event the FDIC is appointed receiver under Title II of the Dodd-Frank Act. This final rule was adopted in consultation with the Securities Investor Protection Corporation (SIPC).
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The SEC voted on July 22nd to adopt amendments to rules governing proxy solicitations. These rules are designed to ensure that clients of proxy voting advice businesses have reasonable access to more transparent, accurate, and complete information. Timely access to such information is vital in making sound voting decisions. These amendments aim to facilitate the ability of those who use proxy voting advice (investors and others who vote on investors’ behalf) to make such informed voting decisions without creating situations where undue costs or delays adversely impact the timely provision of proxy voting advice.
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The SEC’s Division of Economic and Risk Analysis (DERA) recently released its analysis of custom tag usage in financial filings submitted to the SEC using the US GAAP financial reporting taxonomy. This analysis focuses on XBRL exhibits submitted by issuers complying with the 2009 Interactive Data rules pertaining to financial statements. The study covered exhibits submitted as part of Forms 10-K and 10-K/A filings from January 2017 to December 2019.
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On July 16th, the SEC, the Municipal Securities Rulemaking Board (MSRB), and the Financial Industry Regulatory Authority (FINRA) announced they will jointly host a virtual Compliance Outreach Program for Municipal Advisors. The webcast program will be held Thursday, August 13, 2020, from 1 pm to 3 pm ET.
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On July 10th, the SEC announced it is considering amendments to Form 13F that would update the reporting threshold for institutional investment managers and make other targeted changes. Form 13F was adopted pursuant to a 1975 statutory directive designed to provide the SEC with data from larger managers about their investment activities and holdings. This information permits the SEC to take these larger managers’ influence and impact into account in maintaining fair and orderly securities markets. Since that time, the reporting threshold has not been adjusted. Section 13(f) of the Securities Exchange Act gives the SEC broad rulemaking authority to determine the size of the institutions required to file reports and the authority to raise or lower this threshold. Increasing the threshold would allow the SEC to continue to monitor the holdings of larger investment managers while reducing compliance and other burdens on smaller managers.
Continue reading "SEC Proposes Amendments to Update Form 13F" »