Modernizing the Filing Process for Market Participants

As part of its ongoing efforts to modernize and update its rules, the Commission is taking another step today to keep up with technological change in our capital markets. The Commission is amending the process used by market entities, such as stock exchanges and broker-dealers, to submit certain materials electronically through EDGAR, rather than in paper or via email. These amendments also allow electronic signatures in certain broker-dealer filings.

In response to the COVID-19 pandemic, the Commission took prompt actions to balance the needs of market participants, the health and safety of employees, and our mission to ensure fair, orderly and efficient markets. In 2020, the Division of Trading and Markets issued two separate statements regarding paper submissions, manual signatures, and notarization requirements. The statements provided temporary relief from paper-based filings by market entities as they confronted pandemic-related challenges to their business operations. This relief generally worked well and increased efficiency of Commission processing of these filings.

Today’s proposal builds on this relief by requiring these materials to be filed electronically through EDGAR. This will facilitate more efficient analysis and dissemination of information, which benefits investors and other market participants. Moreover, as part of our ongoing modernization efforts, the proposal would require certain information to be submitted as structured data, which will further strengthen the Commission’s information collection and analysis.

Finally, the proposal should facilitate more efficient review and analysis of these forms by investors. For example, the proposed structured data requirements will make it easier for them to retrieve and analyze key data. Investors could leverage these features to automatically flag unusual activity in a registrant’s financial statements or identify significant operational changes.

I support today’s proposed amendments and would like to thank the staff in the Division of Trading and Markets, Division of Economic and Risk Analysis, the Office of the General Counsel, and others across the Commission, for their thoughtful work on the proposal. I encourage the public to participate in the comment process for this rule and look forward to reviewing the comment letters.