New Rules on Website Access to SEC Reports May Require Action by November 15, 2002

by John F. Olson, Ronald O. Mueller, Brian J. Lane, Amy L. Goodman & Casper Partovi

One little-noticed provision included in recent rules adopted by the SEC may impact companies that do not provide access to their SEC filings through company websites. The provision becomes effective this Friday, November 15, 2002. The new provision will require disclosures by many companies filing Forms 10-K for fiscal years ending on or after December 15, 2002.

The rule, adopted in SEC Release No. 33-8128,¹ requires companies that are subject to the accelerated filing requirements for Forms 10-K and 10-Q – generally, companies that are eligible to use Form S-3²– to disclose in any Form 10-K filed for a fiscal year ending after December 15, 2002 whether they provide access to their SEC filings through their website. Specifically, under new Item 101(e) of Regulation S-K, each such company must disclose:

The company's website address, it if has one;

Whether the company makes available free of charge on or through its website³ (if it has one) its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material is electronically filed with or furnished to the SEC;⁴

If the company does not make its filings available in this manner, the reasons it does not do so (including, where applicable, that it does not have an Internet website); and

If the company does not make its filings available in this manner, whether the company voluntarily will provide electronic or paper copies of its filings free of charge upon request.

Although compliance with the disclosure requirement begins with annual reports on Form 10-K filed for fiscal years ending on or after December 15, 2002, the disclosure relates to the company's practice during the period covered by the report. It is important to note that, for the first year, the disclosure relates to the company's practice on or after November 15, 2002, the effective date of the new rule.⁵

Therefore, a company subject to this new disclosure requirement must disclose whether, beginning from November 15, 2002 through the end of its fiscal year, the company made available on or through its website its annual report on Form 10-K, quarterly reports on Form 10-Q, current reports on Form 8-K, and all amendments to those reports as soon as reasonably practicable after such material was electronically filed with or furnished to the SEC. If a company does not provide access to those documents on or through its website, the company will be required to disclose the reasons for not making the reports available.

We encourage clients that are subject to the new accelerated filing requirements and that do not already provide website access to their Exchange Act reports to reconsider their policies in light of the new disclosure obligations.

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1. 1 SEC Release No. 33-8128. www.sec.gov/rules/final/33-8128.htm
2. 2 "Accelerated filers" are companies that (1) have a common equity float of $75 million, (2) have been subject to Section 13(a) or 15(d) reporting requirements for at least one year, (3) have filed at least one annual report pursuant to Section 13(a) or 15(d), and (4) are not eligible to use Forms 10-KSB and 10-QSB.
3. 3 The SEC rule allows companies to provide website access to their Exchange Act reports in a number of ways. For example, companies may establish hyperlinks to the reports via the SEC's website. Since EDGAR now has real-time access, this method of posting will assists companies in meeting the timing requirement as well. Other options available to companies include posting hypertext links to other third-party services, or posting PDF files of the reports. The SEC Release also instructs companies to provide a hyperlink directly to their reports (or to a list of their reports) instead of just providing a hyperlink to the home page or general search page of the SEC or other third-party service. For additional discussion regarding the detailed mechanics of website postings (including the location of links and archiving old reports) see the SEC Release at Section II.D.3.
4. 4 The SEC has indicated that it expects companies to post their filings on their website on the same day they are filed. See SEC Release Section II.D.3.
5. 5 See SEC Release, footnote 131.