March 31, 2000

Jonathan G. Katz, Secretary
Securities and Exchange Commission
450 Fifth Street, N.W.
Washington, D.C. 20549

Re:   File No. S7-05-00; Rulemaking for EDGAR System

Document Technologies, Inc. (dTech) appreciates the opportunity to comment on the proposed Rulemaking for the EDGAR system. As the leading marketer of EDGAR conversion and filing software and an active supplier of EDGAR filing services to the financial printing, legal, and corporate filing communities, we are in frequent contact with over 4,500 filers and their agents. Therefore, we feel that we have a good perspective on the issues raised in your proposal. This letter summarizes our positions detailed in the attached point by point response to the proposed rulemaking.

dTech supports the SEC´s efforts to adopt HTML as a replacement for ASCII in EDGAR submissions. HTML has rapidly overtaken the existing formats for electronic documents and will continue to increase in importance for the foreseeable future. HTML documents have the potential to greatly improve the quality and readability of EDGAR documents because of their linking abilities and improved presentation (over ASCII). At the same time, they help close the gap between the electronic and printed versions of corporate disclosure documents.

The fact that filers have been slow to adopt the HTML format, does not overly concern us. It will take time for companies to get comfortable with the new format and acquire the tools and skills to switch to HTML. Given the time-sensitive nature of most EDGAR filings, we do not expect companies to adopt HTML until they are fully comfortable with the format. To support filers who wish to use HTML, we have recently released version 3 of our EDGAR software application EDGAR Ease® that includes full support for HTML filings. Our experience in our EDGAR service bureau has shown that fully coded HTML filings can be prepared in only 15-20% more time than a comparable ASCII filing if the proper tools are used. We believe that the benefits of HTML over ASCII are easily worth the additional investment. Some of those benefits include:

  • Improved presentation and readability
  • Improved consistency between printed and electronic documents
  • Easier and quicker access to important information in lengthy filings via hypertext links
  • Easier posting of EDGAR filings on corporations´ web sites
  • Better representation of graphical information in EDGAR filings.

    We share and understand the concerns of the dissemination and research communities concerning the increased difficulty of extracting and analyzing data from HTML documents. To this end, we support the SEC´s moves towards XML that are contained in this proposal and encourage the SEC to aggressively adopt XML type tagging for EDGAR documents. XML offers the opportunity to greatly simplify the extraction and analysis of data by researchers and analysts. We support the proposed XML tagging requirements discussed as part of the future rulemaking projects, and encourage the SEC to go further in exploring and adopting a standardized tagging protocol like XFRML or something similar as soon as practical so EDGAR documents may become more "intelligent" and easier to analyze than the current ASCII or HTML formats.

    We think that it is important to return the EDGAR system to a single filing format as soon as practical to eliminate the confusion and inconsistencies caused by today´s dual format. We encourage the SEC to adopt HTML as the single format and to publish a schedule for the mandatory adoption of HTML so filers, their agents, and the dissemination and research communities can plan for the transition. Since HTML filing tools like EDGAR Ease® are already available today, we feel that 12-18 months would be sufficient for all the impacted parties to fully convert to HTML.

    dTech supports the SEC´s selection of HTML 3.2 for EDGAR. Our experience has shown that later versions of HTML display inconsistently in different browsers. This can lead to issues with the accuracy of the dissemination. While display inconsistencies can occur with HTML 3.2, it generally provides much better display consistency than later versions of HTML, especially when viewed in older browsers.

    We also support the ban on hypertext links to information outside the EDGAR database. We believe that the only data that investors should be presented with, while in the EDGAR system, are official SEC filings. Links outside the database could lead to misinterpretation and confusion by the investing public.

    Our one concern with the proposed rulemaking is the short timeline between the proposal and the implementation of the new rules. As the leading supplier of third party EDGAR filing software, we need time to update our product to ensure that it always remains fully compliant with the latest version of the EDGAR system. Therefore, we ask the SEC to allow more lead-time for implementation, and to release the technical specifications of the new EDGAR release far enough in advance for third party providers to make the necessary changes to their products. We feel that the SEC should release the technical specifications of the new EDGAR system at least 60 days before it is implemented. EDGAR Ease is used by thousands of filers and almost all financial printers and securities law firms (in fact, we estimate that at least 35% of all EDGAR filings are converted, compiled or submitted using EDGAR Ease). If we are able to release EDGAR Ease at the same time that you release new versions of the EDGAR system, it would certainly make life easier for this significant section of the filer and filing agent communities.

    Thank you again for this opportunity to comment on the proposed changes to the EDGAR system. We at dTech are always willing to do anything we can to support the SEC in their efforts to improve the EDGAR system and it´s value to filers and investors.

    Sincerely yours,

    Todd Andersen
    Document Technologies, Inc.
    14 Wall Street — 26th Floor
    New York, NY 10005
    (212) 619-4000

    Detailed Comments on the
    SEC Proposed Rulemaking


    A.    Background

           We believe that the adoption of a markup language like HTML is paramount to the long-term success of the EDGAR System. The overall system of regulation and enforcement by the SEC is predicated on filers disclosing meaningful information that allows both the SEC and the public to quickly extract necessary data. For the SEC, this is crucial for determining compliance, and for the public it is important to determine investment potential and risk.

           The SEC has to balance the disclosure burden on registrants with the needs of the SEC and other consumers of the information. What consumers need is intelligent information with markup that is meaningful and useful. ASCII, while not tagged for content, provides a fairly uniform method of conveying data. HTML, which can be used to tag content, increases the complexity of extracting data because of myriad coding practices. PDF, while good for representation of the printed documents, presents serious obstacles for data extraction and searching. We believe that to balance the requirements of all parties, meaningful HTML/XML markup must be added to documents. While HTML/XML places some additional burden on filers, the resulting documents would be significantly more useful to all parties. We therefore recommend that the SEC adopt HTML mixed with XML for EDGAR filings, perhaps integrating a future standard like XFRML.

           Any changes to EDGAR will increase the filers´ burden, but if such changes are selected carefully they will yield good long-term returns. Further, the burden of creating "EDGAR" documents should be taken within the context of the total disclosure process, including the requirements for accounting and legal services. When viewed in that context, the burden for EDGAR filings is minor. Additionally, the SEC requires registrants to provide certain disclosure to use public and protect investors. Registrants use public markets to raise capital or to fund investment opportunities. The burden of filing is part of the cost of facilitating such transactions.

           There are few today who question the value of the EDGAR System. A mere 7 years ago, this was not true. Well thought out investment and improvement today will pay off for tomorrow´s EDGAR System.

    B.    HTML and PDF Environment

           The SEC´s limitations on HTML formatting reduce the utility of the filed documents for other purposes. For example, if a filer, such as an investment company or mutual fund, wants to post the same prospectus on the web that is filed with the SEC, the filer must frequently create two separate documents. The differences between state-of-the-art web documents and SEC HTML are so significant that companies who post their documents to the web usually convert the document twice, once for each medium. While there are many practical areas of HTML that the SEC cannot accommodate (such as external linking), we believe the gap between filed and web documents should be closed over time. Closing the gap will provide an incentive for registrants to prepare and file EDGAR submissions using HTML.

           The inclusion of PDF is a reasonable way to provide a close replicate to printed disclosures. We agree that PDF should not become an official filing medium as PDF documents present difficult challenges in consistently searching and extracting data.

    C.    Use of HTML

         1   We think that it is important to return the EDGAR System to a single filing format as soon as practical to eliminate the confusion and inconsistencies caused by today´s dual format. We encourage the SEC to adopt HTML as the single format and to publish a schedule for the mandatory adoption of HTML so filers, their agents, and the dissemination and research communities can plan for the transition. Since HTML filing tools like EDGAR Ease are already available today, we feel that 12-18 months would be sufficient for all the impacted parties to fully convert to HTML.

           2   Use of a single file for documents is a practical requirement. The major reasons for continuing with documents as a single file include: control, searching, data extraction and printing. Perhaps the SEC and disseminators could use the <PAGE> tag as a method to optionally break the document into smaller sections for viewing and navigating.

           3   The SEC should consider the application of at least part of the CSS2 specification for styling documents. The limited HTML 3.2 tag set should still be used to insure proper cross browser display. Further, the SEC should consider allowing one level of tables within tables to facilitate better document layout and the ability to present more complex pages. Such changes, when combined with images, would allow filers to more easily re-purpose EDGAR documents for web posting.

    D.    Use of PDF

           We feel the SEC should not limit the size of PDF files and should encourage filers not to use TIFF or other image formats to represent information that should be included as text (such as optically scanning in pages of information).

    E.    Graphic and Image Material

           1   No comment.

           2   We propose that the SEC allow filers optionally to include performance data in the form of a commented table if such data is not provided as a text table within the HTML document. For example:

      <h2 ALIGN=CENTER><>10 Year Performance</FONT></h2>
      <!-- Performance Table
                                        XYX                    ABC Brothers
                                Aggressive Income Trust    Aggregate Bond Index
                                -----------------------    --------------------
                  2/90                 $10,000                   $10,000
                  1/91                 $ 9,927                   $11,163
                  1/92                 $12,652                   $12,618
                  1/93                 $14,208                   $14,002
                  1/94                 $16,872                   $15,282
                  1/95                 $15,748                   $14,928
                  1/96                 $19,495                   $17,458
                  1/97                 $23,027                   $18,027
                  1/98                 $26,473                   $19,960
                  1/99                 $25,114                   $21,572
                  1/00                 $26,912                   $21,174
                         (Period covered is from 2/1/90 to 1/31/00)

           In the above example, only the performance chart would appear within a browser because the text table was commented out. If the consumer needed the original data for the table, they could "view source," find the table data and copy it into the desired package.

           3   We share the concerns of the SEC. However, if the long-term goal were to allow multimedia content in filings, the issues by the SEC expressed in this paragraph would conflict with that objective.

           4   File size is an important issue but automatically limiting the size could pose difficulties for filers. For example, if a prospectus contains a complex and detailed organizational chart for the merging of two companies, the size of the file may be required to be large to allow proper expression of detail. Filers do have options to reduce the size of such images by reducing the resolution, which of course, thereby reduces legibility. We believe the SEC should encourage filers to use the best and appropriate formats and resolution to aid the consumer and reduce SEC storage requirements. The SEC should also develop a method to audit for compliance of the type of images filed to keep filers from submitting "pages" of graphic information that should be filed as text.

           5-6   If the SEC requires certain information such as performance charts as graphics, filers should submit them as graphics. The SEC should also require, and the legal community would probably agree, that inclusion of all legally material graphic elements be mandatory. Inclusion of items such as logos or pictures of nominated directors could be optional.

           7   The SEC should provide a uniform and effective method of private submission and allow graphics to be marked as private. The SEC should consider allowing a "<PRIVATE>" tag within the document header to allow any document to be filed with a request for privacy. The system should check for the validity of the privacy request.

    F.    Limitation of Hypertext Links

           1   Hyperlinks are inserted for the convenience of the reader, allowing her/him to quickly jump to related information. Using hyperlinks within a document for the Table of Contents, Registration Cross Reference or "see" cross-referencing should be allowed. External links to other documents should be treated legally and specifically binding as they are for Incorporation by Reference as may be seen in an exhibit index.

           2   The SEC should not allow links outside of the controlled SEC document database.

           3   No comment.

           4   Hyperlinks should only be used to link to documents which would normally be incorporated by reference.

           5-7   We agree.

           8   Linking to different issuers is a complex question. Should the other issuers be notified or be required to grant permission? The SEC may consider adding appropriate information to the submission header, similar to group members or co-registrants, indicating a reliance on non-issuer documents.

           9   No comment.

           10   This should be treated as if the reference was made in textual form.

           11   This should be treated as if the reference was made in textual form. If an amendment were filed, the previously filed documents would not have their references updated unless the issuer filed an amendment to those documents as well.

           12   The SEC´s web server can contain a list of archived files and display a page to the user indicating the document is no longer available. Many web servers provide a layer of error reporting to give the user a more intelligent response than "Error 404" or "document not found".

           13   We agree.

           14   External links cannot be controlled and should not be allowed.

    G.    Prohibition Against Electronic Submissions Containing Executable Code

           1   We agree.

    H.    Method of Electronic Transmission

           1   No comment.

    Direct Transmission via Dial-Up Modem and Internet

           1   Update modems as required.

           2   SSL is acceptable provided that all interface protocols and methods are publicly available for third party filing solutions.

           3   We agree. The SEC should also continue to allow direct dial entry that offers higher security. The SEC may also consider transmission only through UUNet which will provide for improved control of the network yet still allows use of standard Internet technology.

    Magnetic Tape

           1   No comment.


           1   No comment.

    I.    Modernization of EDGARLink

           1   No comment.

           2   A method must be available for extracting SEC header template data for third party software solutions. The current submission header database can be extracted from EDGARLink fairly quickly. This database allows for third party header building and validation. The SEC should also make sure all optional tags are included within the EDGARLink database that are specified within the EDGAR Filer Manual. There have been numerous suspensions as a result of filers not including optional information because they failed to examine the EDGAR Filer Manual while there was no indication of the tag within the EDGARLink database.

           3   Insufficient information to make comment.

           4   Can this activity occur off-line? Will the SEC EDGAR System be responding in real time to information entered? In order to "check for errors" will any data be sent to the SEC, or can the entire process be carried out off-line?

           5   How will EDGARLink invoke word processing or third party software? When will the specification be available for this interface?

    J.    HTML Standard Tag Set

           1   The SEC should consider allowing CSS as well as tables within tables (also known as nested tables). The SEC EDGAR system should also check filer submissions for HTML DTD compliance. Failure to comply with the DTD frequently leads to differences in browser display. The present EDGAR System is rather loose with respect to what is "allowed" versus what is not allowed. For example, the EDGAR Filer Manual specifically spells out what attributes may be used for what elements, yet the EDGAR System appears to perform minimal validation.

           The EDGAR System also allows the use of the "FONT FACE" attribute that is not part of the 3.2 specification. By not validating the FACE attribute, the SEC is opening the door for filers to specify font faces that the reader´s system may not be able to render. This can cause serious display problems when certain symbol fonts are specified. We believe the SEC should officially allow filers to use the FACE attribute, but restrict the font names that can be used.

            In addition to the above, the SEC should also allow the use of common formatting attributes such as ALIGN=JUSTIFY, which is not part of the HTML 3.2 Specification.

           The SEC should allow revisions to be performed with the <R></R> tags only and not allow the "text" versions of the tags to be used as a substitute (i.e., &lt;R&gt; and &lt;/R&gt;).

    K.    Financial Data Schedules

           1   No comment.

    L.    Possible Future Rulemaking Projects

           1   No comment.

    EDGAR Tags

           1-2   Using XML tagging for the submission header and body is a good move. However, there are a number of issues to consider. First, will the SEC develop its own XML DTD for content, or will it use a format such as XFRML? Second, will there be issues with DTD conflicts between the submission header, document header and content DTD´s?

           The SEC should examine the XML question seriously and carefully since once a markup is selected, the documents within the archive must be readable and useable for future users. Further, the selected XML DTD must be extensible and work for the majority of disseminators.

           The SEC should review and participate in the XFRML process and then determine, with input from the public, what DTD should be adopted.

    Investment Company and Insurance Products — Multiple "Primary" EDGAR Documents

           1   Modules seem appropriate for this task. Exceptions and rules could also be made for hyperlinking such sections of documents.


           No comment.


           No comment except for as provided above.


           No comment except for as provided above.


           No comment except for as provided above.


           No comment except for as provided above.


           No comment except for as provided above.


           1-8   No comment except for as provided above.

           9   "§232.11 Definition of terms used in part 232 — Official Filing"   It is unclear whether the "official filing" is the actual text and HTML codes submitted to and stored by the EDGAR System or the "rendered" or "printed" version of that filing by a browser. If the official filing is a rendition from a browser, then the question is which browser and software version? Considering the potential for dropped or incorrectly ordered text as a result of potential coding errors, the Commission should clarify this point and set a standard for filers to follow.

           10   "§232.12 Business hours of the commission"   The SEC should consider leaving the EDGAR System open for submissions 24 hours a day, Monday 8a.m through Friday 10p.m., with SEC Filer Support available from 8 a.m. to 10p.m.

           11   "§232.103 Liability for transmission errors or omissions in documents filed via EDGAR"    Are coding errors which result in incorrectly displayed or omitted text covered under this provision?

           12-43   No comment except for as provided above.