That’s the headline on a sidebar on the SEC’s newest Form 144 EDGAR page, providing psychological support and comfort to ease the trauma—I mean the transition—for new filers of electronic Forms 144. You might recall that, in June, the SEC adopted rule amendments that require electronic submission of Forms 144 related to the sale of securities of Exchange Act reporting companies. According to SEC Chair Gary Gensler, in “fiscal year 2021, more than half of all filed Form 144 forms—30,000 in total—were filed on paper. In a digital age, it’s important for investors to have easy, online access to material information, rather than needing to visit SEC facilities to access that information. This is particularly important during Covid-19, which has made in-person visits to access these filings even more challenging. Even when access to physical copies isn’t restricted, there are other costs associated with paper filings. It costs investors money and time to travel to the SEC’s reading room. It costs the SEC money and time to process paper filings. These amendments will reduce costs and drive more efficiencies for investors, filers, and the SEC.” (See this PubCo post.) The SEC has now posted the updated EDGAR Filer Manual instructions for electronic filing of Forms 144, commencing the transition; electronic filing will become mandatory in about six months. To facilitate the transition, the SEC has put together FAQs, step-by-instructions and a “wealth” of other resources to assist new electronic filers. There’s even a communications toolkit with the message “Don’t panic!”
Under the amendments, Form 144 has become an online fillable document, similar to Form 4, that will facilitate electronic filing and be machine-readable and available for automated and efficient analysis. It will also exclude certain personally identifiable information, such as home address. In addition, amendments to Rule 144(h)(1) delete the requirement to send a copy of the Form 144 to the principal exchange. Filers may access, complete and submit a Form 144 online using the EDGAR Online Forms Management Website or, alternatively, submit a filer-constructed XML Form 144 on EDGAR. The SEC’s Form 144 EDGAR page offers all kinds of directions and instructions about the filing, as well as step-by-step guidance for using the online fillable Form 144. (Note that Forms 144 related to the sale of securities of non-reporting companies will continue to be submitted on paper.)
The amendments provided for a six-month transition period, which extends for six months beginning with the date of publication in the Federal Register of the update to the EDGAR Filer Manual that addresses changes to Form 144, Adoption of Updated Filer Manual Release No. 33-11101 (PDF). [Update: the compliance date has now been announced as April 13, 2023.] The update is dated September 19; however, publication in the Federal Register has not yet occurred. As a result, the SEC estimates that the compliance deadline will occur sometime in March or April 2023. The SEC believes that the transition period will allow adequate time to prepare documents for electronic submission and to allow paper filers who would be first-time EDGAR filers to apply for access to file on EDGAR.
As noted above, filing persons who do not yet have an EDGAR account will need to apply for one, even if they plan to have an authorized agent (a broker-dealer, lawyer or filing agent) submit the electronic Form 144 on EDGAR on their behalf. In that case, the filing persons will need to authorize their agents to file on their behalf and provide their EDGAR account numbers (CIK) and CIK Confirmation Codes (CCC) to their authorized agents to file Form 144 electronically. The Form 144 EDGAR page provides guidance about how to determine if reporting persons have existing EDGAR accounts and what to do if the reporting persons already have EDGAR accounts, but have forgotten their EDGAR access codes. The SEC urges new electronic filers to apply for an EDGAR account as soon as possible, because each application requires staff review and will take time to complete. The Form ID application for EDGAR access must be completed online, signed and notarized; then, the signed, notarized document must be uploaded to EDGAR to submit it to the SEC in support of the Form ID application. Instructions for doing so are found on the EDGAR—Information for Filers page on SEC.gov. (Hat tip to thecorporatecounsel.net.)