On December 11, 2020, the Securities and Exchange Commission (the “SEC") announced its adoption of a new rule under Regulation S-T in connection with its administration of the Electronic Data Gathering, Analysis, and Retrieval system (“EDGAR") to promote the reliability and integrity of EDGAR submissions, and also the adoption of revisions to Volumes I and II of the EDGAR Filer Manual and related rules under Regulation S-T, including provisions regarding electronic notarizations and remote online notarizations, which include electronic signatures.
Rule 15 under Regulation S-T
1. The new Rule 15 under Regulation S-T allows the SEC to take the following actions to promote the reliability and integrity of submissions made through EDGAR:
2. Sensitive Personally Identifiable Information: if the SEC determines that a submission contains personally identifiable information that if released may result in financial or personal harm to an individual:
- redact such personally identifiable information from the submission;
- prevent dissemination of the submission; and/or
- remove the submission from the SEC’s public website;
3. Cybersecurity Threat: prevent any submission to EDGAR that poses a cybersecurity threat, including but not limited to, submissions containing any malware or virus;
4. System or SEC Staff Errors: correct and/or prevent public dissemination of any submission to EDGAR, if the SEC determines that such submission:
- has not been processed by EDGAR;
- has been processed incorrectly by EDGAR; or
- contains an error attributable to the SEC staff;
5. Incorrect EDGAR Identifier: remove and/or prevent public dissemination of a submission, if the SEC determines that a submission is made under an incorrect EDGAR unique identifying number;
6. Disputes Over Authority: prevent a filer’s ability to make submissions, if the SEC determines that a dispute exists regarding the authority to make submissions on behalf of a filer, until the dispute is resolved;
7. Misleading or Manipulative: prevent acceptance or dissemination of a submission, if the SEC believes that such attempted submission may be misleading or manipulative, unless, after evaluating the circumstances surrounding the submission, the SEC’s concerns are satisfactorily addressed;
8. Unauthorized Submissions: prevent any further submissions by the filer or otherwise remove the filer’s access to EDGAR, if the SEC has reason to believe that a filer has made an unauthorized submission or attempted to make an unauthorized submission; or
9. Similar Administrative Issues: take such further steps as are appropriate, if the SEC believes that, to promote the reliability and integrity of submissions through EDGAR, it must address a submission issue that cannot be addressed solely by the actions discussed above.
10. In each case above, the SEC may communicate as necessary with the filer regarding the submission and facilitate the filer’s submission of a corrective disclosure, if applicable.
11. The SEC may take any of the actions above without providing advance notice to the filer or any other person.
12. As soon as reasonably practicable after taking any of the actions listed above, the SEC will provide written notice and a brief factual statement of the basis for the action to the filer and any other person the SEC determines is relevant to the matter (“relevant persons"), by electronic mail to the email address on record in the filer’s EDGAR account, and to the email address of any relevant persons and, if necessary, by registered, certified, or express mail to the physical address on record in the filer’s EDGAR account and the physical address of any relevant persons.
13. The new Rule 15 will become effective upon its publication in the Federal Register.
14. Electronic Notarizations and Remote Online Notarizations
15. Volume I of the EDGAR Filer Manual provides general information regarding electronic submissions to the SEC on EDGAR. The revisions to Volume I remove unnecessary and outdated content and relocate basic instructions and technical explanations to a newly designed webpage on the SEC’s website.
16. Further changes are in connection with the adoption of new Rule 15, in order to allow the SEC to prevent acceptance or dissemination of an attempted submission on EDGAR or to revoke EDGAR access.
17. In addition, the SEC is:
- amending Rule 10 of Regulation S-T to accept electronic notarizations and remote online notarizations, which include electronic signatures, in addition to notarizations that include manual signatures, to support requests for EDGAR access;
- permitting foreign filers to use the foreign local equivalent of a notary public or to obtain remote online notarization recognized by the law of any state or territory of the United States or the District of Columbia;
- amending Rule 10 of Regulation S-T to exclude the authentication document in Rule 10(b) from the signature requirements of Rule 302; and
- amending Rule 12 of Regulation S-T to reflect the SEC’s current hours for submission “from 6 a.m. to 10 p.m., Eastern Time" of electronic filings and to conform to the Filer Manual.
18. The SEC recognizes that, currently, “over 36 states have enacted electronic notarization laws, while 25 states have enacted remote online notarization laws," and that 34 states “have issued emergency orders temporarily authorizing notaries to perform remote online notarization" (see What States Allow Electronic Notary, DocVerify, Remote Notarization: What You Need to Know, National Notary Association (November 13, 2020); Answers To Urgent Questions Notaries Are Asking About Remote Online Notarization, National Notary Association (Aug. 14, 2020)).
19. The amendments to the EDGAR Filer Manual will become effective upon the date of publication in the Federal Register.
20. Comments to Form ID Collection of Information
21. The SEC is also providing notice and soliciting comments on potential changes to the burden estimates associated with the Form ID collection of information pursuant to the Paperwork Reduction Act of 1995.
22. The SEC is requesting comments on:
- whether the proposed collection of information is necessary for the proper performance of the functions of the agency, including whether the information will have practical utility;
- the accuracy of the agency’s estimate of the burden imposed by the collection of information;
- ways to enhance the quality, utility, and clarity of the information collected; and
- ways to minimize the burden of the collection of information on respondents, including through the use of automated collection techniques or other forms of information technology
23. Comments regarding the Form ID collection of information requirement for purposes of the Paperwork Reduction Act of 1995 should be received on or before the date that is 60 days after date of publication in the Federal Register.
We would like to thank Rodrigo Surcan in our New York office for his work on this article.