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Filing Fee Disclosure and Payment Methods Modernization
Jan. 21, 2022
A Small Entity Compliance Guide[1]
Introduction
On October 13, 2021, the U.S. Securities and Exchange Commission (the “Commission”) adopted amendments that will modernize filing fee disclosure and payment methods. The Commission revised most fee-bearing forms, schedules, statements, and related rules to require each filing fee table and accompanying disclosure to include all required information for fee calculation in a structured format. The amendments will add options for fee payment via Automated Clearing House (“ACH”) and debit and credit cards, and eliminate options for fee payment via paper checks and money orders. The amendments are intended to improve filing fee preparation and payment processing by facilitating both enhanced validation through filing fee information structuring and lower-cost, easily routable payments through the ACH and debit and credit card payment options. Finally, the Commission adopted other amendments to enhance the efficiency of the fee process.
Who is affected by the amendments?
The amendments affect entities that file certain fee-bearing documents under the Securities Act of 1933 (the “Securities Act”), Securities Exchange Act of 1934 (the “Exchange Act”), or Investment Company Act of 1940 (the “Investment Company Act”).
What changes were made by the amendments?
The amendments changed various requirements related to the following:
Fee-bearing Form Content and Structuring
The Commission assesses and collects statutorily required filing fees for:
- certain corporate filings, including those related to registered securities offerings, tender offers, and merger or acquisition transactions; and
- registered offerings by investment companies.
The amendments require filers of the following fee-bearing documents to provide all required information for filing fee calculation in an exhibit structured in Inline eXtensible Business Reporting Language (“XBRL”):[2]
Securities Act of 1933 and/or Investment Company Act
Forms S-1, S-3, S-4, S-8, S-11, F-1, F-3, F-4, F-10, N-2, and N-14[3]
Securities Exchange Act of 1934
Schedules 13E-3, 13E-4F, 14A, 14C, TO, and 14D-1F and Statements under Rule 13e-1
Fee Payment Process
The amendments add the options for fee payment via ACH and debit and credit cards to the option for fee payment via wire transfer and eliminate the options for fee payment via paper checks and money orders.
Fee Offsets
The amendments address cases where a registrant has not relied on Rule 457(o) to calculate a required filing fee and wishes to concurrently (i) increase the amount registered of one or more classes of securities on the registration statement or add one or more classes; and (ii) decrease the amount registered of one or more other classes on the same registration statement. In these cases, the registrant may, in a pre-effective amendment, recalculate the total filing fee due for the registration statement in its entirety based on the then-current expected offering amounts, offering prices and filing fee rates, and claim a fee offset under Rule 457(b) for amounts previously paid in connection with the registration statement.
What are the compliance dates of the amendments?
The amendments are effective January 31, 2022, except for the amendments adding and removing fee payment options, which are effective May 31, 2022. Compliance with the structuring requirements will be phased in over time as follows, but compliance with the other requirements will be mandatory upon the requirements’ effectiveness:[4]
|
Filer |
Compliance Date[5] |
|
Large accelerated filers |
Filings submitted on or after 30 months after the requirements’ effectiveness (July 31, 2024). |
|
Accelerated filers Certain investment companies that file registration statements on Forms N-2 and N-14 All other filers |
Filings submitted on or after 42 months after the requirements’ effectiveness (July 31, 2025). |
Voluntary early compliance with the structuring requirements is permitted once the Electronic Data Gathering, Analysis, and Retrieval (“EDGAR”) system has been modified to accept filing fee-related information in Inline XBRL for all fee-bearing documents subject to the amendments, which is anticipated to be approximately six months before the earliest compliance date.[6]
Other Resources
The adopting release for these amendments can be found on the Commission’s website at https://www.sec.gov/rules/final/2021/33-10997.pdf.
Contacting the SEC
The Commission’s Division of Corporation Finance is happy to assist small companies with questions regarding the amendments. You may contact the Division for this purpose at (202) 551-3500 or at https://www.sec.gov/forms/corp_fin_interpretive. The Commission’s Division of Investment Management’s Chief Counsel’s Office is also available to assist small entities and others with questions regarding the rule amendments. You may contact that Office for this purpose at (202) 551-6825 or IMOCC@sec.gov.
Questions on other Commission regulatory matters concerning small companies may be directed to the Division of Corporation Finance’s Office of Small Business Policy at (202) 551-3460 or smallbusiness@sec.gov.
[1] This guide, dated as of January 21, 2022, was prepared by the staff of the U.S. Securities and Exchange Commission as a “small entity compliance guide” under Section 212 of the Small Business Regulatory Enforcement Fairness Act of 1996, as amended. The guide summarizes and explains the rules adopted by the Commission but is not a substitute for any rule or form. Only the rule or form itself can provide complete and definitive information regarding its requirements.
[2] Structured data is data that is tagged to make it machine-readable, facilitating its use by investors and other market participants, such as data aggregators (i.e., entities that, in general, collect, package, and resell data). Inline XBRL embeds the tagged information in the document itself rather than in an exhibit.
[3] The amendments require filers of Forms SF-1 and SF-3 to provide all required information for fee calculation in an exhibit but make structuring optional.
[4] Consequently, starting on January 31, 2022, filers of most fee-bearing documents will be required to provide all required information for filing fee calculation in an unstructured exhibit. Filers will not be required to structure these exhibits until the compliance dates set forth in the table this guide provides.
[5] The requirement to structure filing fee exhibits in filings submitted on or after the relevant compliance date applies regardless of whether previous related filings were submitted prior to the compliance date and did not contain a structured filing fee exhibit. For example, if a filer initially filed a registration statement on Form S-1 without a structured filing fee exhibit before its compliance date and filed a pre-effective amendment registering additional securities after that date, the filer will be required to structure the filing fee exhibit in that pre-effective amendment. Similarly, if a shelf registration statement was filed on Form S-3 without a structured filing fee exhibit that went effective before the filer’s compliance date and the filer then filed a related prospectus under Rule 424(b) with a filing fee exhibit after the filer’s compliance date, the filer must structure the filing fee exhibit. Also similarly, if a Schedule TO was filed without a structured filing fee exhibit before the filer’s compliance date and the filer then filed an amendment to the Schedule TO to increase the transaction value after the filer’s compliance date, the amended Schedule TO must include a structured filing fee exhibit.
[6] A filer that voluntarily chooses to structure a filing fee exhibit before its compliance date will still be free to structure or not structure future filing fee exhibits until the filer’s compliance date.