SEC's EDGAR Goes Global to Meet Investors' Needs

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Starting November 4, 2002, the Securities and Exchange Commission will take its EDGAR (Electronic Data Gathering Analysis and Retrieval) system global by requiring non-US as well as US issuers of securities to file certain documents electronically. This means investors will have free online access to information about public companies that are traded on US capital markets, regardless of the company's country of origin.

In addition to the filings of foreign private issuers, investors will have online access to filings of foreign governments, as well as Multijurisdictional Disclosure System (MJDS) forms filed by Canadian issuers. The SEC will also permit, but not require, supranational entities, such as the World Bank, to file their reports electronically.

The effective date represents an extension of time over the timeframe suggested in proposed rules issued on September 28, 2001. Other changes reflected in the final rules:

  • Investors can expect to see an English summary in some filings, instead of a full English translation of a foreign language exhibit or attachment to a filing. The SEC did not eliminate the option as originally proposed. Instead, it provided better guidance regarding what constitutes an adequate English summary.
  • Some documents will still be unavailable electronically. The list of documents that can still be submitted in paper form was expanded to include a Form 6-K report that does not contain new material information and was not distributed to the press or the company's security holders, as well as Form 6-K reports that submit a foreign company's "glossy" annual report to security holders.
  • Electronic filings will not be required to include a written representation regarding the fairness and accuracy of any English translation.

In making the announcement, the SEC indicated it did not expect the changes would impose a significant hardship on foreign companies. Advances in information and telecommunications technology, together with the Commission's modernization of EDGAR, have reduced the costs of EDGAR filings for foreign issuers and made these costs more comparable to those of domestic filers.

-Rosemary Schlank

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