Tag: Form 144

SEC adopts amendments mandating more electronic submissions

On Friday, the SEC announced that it had adopted amendments to require electronic submission of several forms that currently may be submitted on paper and to require structured data reporting (i.e., XBRL) for Form 11-K. Most notably, the amendments require electronic submission of Forms 144 and, in PDF format, of “glossy” annual reports. 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.” 

SEC proposes more mandatory electronic filing

Yesterday, the SEC published proposed amendments—which the SEC voted unanimously to propose—to update the electronic filing requirements.  The proposed rule and form amendments would require that certain forms be filed or submitted electronically and would amend certain forms to require structured data reporting (i.e., XBRL). Most notably, the proposal would require electronic submission in PDF format of “glossy” annual reports.  According to SEC Chair Gary Gensler, the “proposed amendments are intended to modernize and increase the efficiency of the filing process—for filers, investors, or other interested parties.”  The comment period will be open for 30 days.

SEC proposes changes to Rule 144

Surprise! Yesterday, the SEC announced that it had voted, without an open meeting, to propose amendments to Rule 144 to revise the method for determining the holding period—essentially eliminating tacking—for securities “acquired upon the conversion or exchange of certain ‘market-adjustable securities.’ The proposed amendment is intended to reduce the risk of unregistered distributions in connection with sales of those securities.” It is worth emphasizing that the proposed amendment “would not affect the use of Rule 144 for most convertible or variable-rate securities transactions.” Essentially, the amendment is intended to apply to “floating priced” or “floating rate” convertibles, often referred to as “death-spiral” converts, issued by companies that do not have securities listed, or approved for listing, on a national securities exchange. The proposed amendments would also:
~mandate the electronic filing of all Form 144 notices related to the resale of securities of Exchange Act reporting companies;
~eliminate the Form 144 filing requirement for non-reporting companies;
~change the filing deadline for Form 144 to coincide with the filing deadline for Form 4;
~amend Forms 4 and 5 to add a check box to permit filers to indicate that a sale or purchase reported on the form was made pursuant to a transaction that satisfied Rule 10b5-1(c); and
~make minor changes to Form 144, including eliminating certain personally identifiable information.
The SEC also indicated that it intends to create an “online fillable” document for entering the information required by Form 144 and, where applicable, Form 4. According to SEC Chair Jay Clayton, the “proposed amendments modernize, clarify and strengthen Rule 144, including to ensure that holders of market-adjustable securities are assuming the economic risks of their investment rather than acting as a conduit for an unregistered sale of securities to the public on behalf of an issuer….In addition, the proposed shift to electronic filing of Form 144 provides a necessary update to reflect today’s markets, particularly given the benefits—and the feasibility—of electronic filing our experience over the past nine months has demonstrated.”

Happy holidays! Happy new year!

Corp Fin staff extends earlier temporary relief addressing logistical issues

In March and April, the Corp Fin staff issued three statements providing temporary relief to address various logistical issues and other complications resulting from the COVID-19-related shutdowns. The relief related to authentication document retention requirements under Rule 302(b) of Reg S-T, submission of Forms 144 in paper and submission of a variety of other paper forms outside of Form 144.  In two cases, the staff statements had provided relief only through June 30. Unfortunately, that turned out to be much too optimistic. Today, the staff extended the time frames for all three statements for an indeterminate period. The new statements can be found here, here and here.   In each case, the temporary relief applies “until the staff provides public notice that it no longer will be in effect; that notice will be published at least two weeks before the announced termination date.”

Corp Fin staff provides relief for Form 144 paper filings

The Corp Fin staff is once again addressing logistical difficulties that have cropped up in light of COVID-19—this time it’s the submission of Forms 144 in paper. In this statement, the staff is providing temporary relief with regard to paper Forms 144 submitted during the period from April 10 through June 30, 2020.  In the statement, the staff advises that it will not recommend enforcement action if, in lieu of mailing or delivering paper Forms 144 under Rules 101(b)(4) or 101(c)(6) of Reg S-T, the filer (or submitter) attaches a complete Form 144 as a PDF attachment to an email sent to PaperForms144@SEC.gov.