On October 28th, the SEC adopted a new rule and rule revisions to the regulatory framework for derivatives usage under the Investment Company Act. The enhancements will provide an updated and thorough approach to the regulation of registered investment funds’ derivatives usage that reflects developments over the past decades and focuses on investor protection matters. The Investment Company Act generally limits registered funds and business development companies from engaging in transactions that involve potential future payment obligations. This may include obligations under derivatives such as forwards, futures, swaps and written options. The new rule allows funds to enter into these transactions if they comply with conditions designed to protect investors, such as adopting a derivatives risk management program and complying with a limit on the amount of leverage-related risk that the fund may obtain based on value-at-risk (VaR). Continue reading "SEC Revises Regulations for Derivatives Usage..." »

On September 28th, the SEC announced a new proposal to improve the operational transparency, system integrity, and regulatory oversight of alternative trading systems. These systems trade government securities and repurchase and reverse repurchase agreements on government securities. US government securities markets are among the most significant and liquid securities markets in the world. Including US Treasury securities and agency securities, government securities comprise more than half of the outstanding debt issuances in the US bond market. They therefore play a critical role in the US and global economies. During the latter half of 2019, the average daily trading volume in government securities was approximately $835 billion. In addition to seeking public opinion on regulating these markets, the SEC is also requesting comment on the regulatory framework for electronic platforms that trade corporate debt and municipal securities. Continue reading "SEC Proposes to Extend Regulations ATS and SCI..." »

On September 23rd, the SEC’s staff of the Division of Economic and Risk Analysis (DERA) issued some information concerning Form 8-K and the Document Period End Date. DERA observed that some filers have designated the filing date of Form 8-K in XBRL and Inline XBRL submissions as the Document Period End Date. Other filers, however, have used the filing date from a previously submitted Form 8-K or a date that is unrelated to the reported event. Continue reading "SEC Releases Observations on Form 8-K Document..." »

On September 21, 2020, EDGAR Release 20.3 was released by the Securities and Exchange Commission. This release includes new submission types for variable contracts and new exhibits for Forms N-3, N-4, and N-6. EDGAR will now also allow filers to redline changed content in inline XBRL submissions.

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With the release of EDGAR 20.3, changes will be made to the way in which filers can redline revisions in their submissions to the EDGAR system. These changes allow for revisions within Inline XBRL. Existing revision tags have historically been placed loosely around text that has been altered to indicate the revision. In addition, broken character entities, &ltR&gt and &lt/R&gt, could be used in place of tags. Neither of these methods are acceptable for Inline XBRL filings since they both violate that format’s rigid XHTML requirements.

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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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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 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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The SEC has released an additional statement concerning paper filing requirements given the ongoing logistical difficulties caused by the COVID-19 pandemic. The staff of the SEC’s Division of Corporation Finance is aware of the troubles encountered in submitting certain forms (other than Forms 144) in paper given the spread of COVID-19.
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The staff of the SEC’s Division of Corporation Finance states that the Division is aware of logistical difficulties of submitting Forms 144 in paper given the ongoing impact of the COVID-19 pandemic. Given ongoing health and safety concerns related to COVID-19, the staff will not recommend enforcement action if Forms 144 filed in paper under Rules 101(b)(4) or 101(c)(6) of Regulation S-T are submitted via email in lieu of mailing or delivering the paper form to the SEC if the filer or submitter attaches a complete Form 144 as a PDF attachment to an email sent to PaperForms144@SEC.gov.
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On June 29th, the SEC issued an order to update the filing threshold for broker-dealers’ Form 17-H filings made pursuant to Exchange Act Rules 17h-1T and Rule 17h-2T. The threshold has not been updated in nearly 30 years. In 1992, the SEC adopted the 17h Rules, which set forth specified recordkeeping and reporting requirements for certain broker-dealers that are part of a holding company structure. This was pursuant to the Market Reform Act of 1990. Broker-dealers that do not hold customer funds or securities, owe money or securities to customers, or otherwise carry the accounts of or for customers are exempt from the 17h Rules. This exemption applied provided that these broker-dealers maintain capital, including subordinated debt, of less than $20 million.
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The SEC reminds filers who have taken advantage of temporary relief measures regarding access to the EDGAR system that the required notarized authentication document must be submitted within 90 days of submitting the access application. This temporary relief (Temporary Final Rule 10(c)) was enacted because of the ongoing impacts of the COVID-19 pandemic which may have made it difficult for filers to obtain notarized documentation in a timely fashion.
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Starting with their first 10-Q filed for a fiscal period ending on or after June 15, accelerated filers will be required to submit interactive data using Inline XBRL. Included in this transition are requirements, adopted by the SEC in March 2019 as part of the FAST Act Modernization and Simplification of Regulation S-K, to tag additional information that is visible on the cover page of Form 10-Q, Form 10-K and Form 8-K.

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On May 4th, the SEC’s Division of Corporation Finance released information for filers related to disclosure requirements during the COVID-19 pandemic. Because this information relates to unique circumstances arising from COVID-19, the SEC is not including them within its Compliance and Disclosure Interpretations. The FAQs below may be supplemented or amended as the situation with the pandemic continues to evolve.
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On April 23rd, the SEC’s Division of Corporation Finance released a statement regarding the requirements for certain paper documents given the impacts of the COVID-19 pandemic. The staff of the division recognizes that submitting particular forms (with the exception of Forms 144) may be difficult in the current circumstances. Continue reading "SEC Statement Regarding Requirements for..." »