Bowne & Co., Inc.
April 15, 1999
Mr. Jonathan G. Katz
Re: Rulemaking for EDGAR System; Release No. 33-7653; File No. S7-9-99
Dear Mr. Katz:
Bowne & Co. appreciates the opportunity to provide the Securities and Exchange Commission with comments on its proposed amendments to the rules governing requirements for electronic filing.
XML, as a means of identifying content, holds great promise for the future utility of EDGAR data and probably deserves to be addressed in a more comprehensive manner, possibly through a separate agency Request for Information, that presents the details of the SEC's objectives and approach especially a description of the extent to which the SEC expects registrants to be responsible for adding XML tags to their filings. For XML to be useful in a document collection as large and as complex as EDGAR, the agency should consider establishing defined standards through a published DTD.
As a final comment, commercial search engines are not yet supporting XML. Only the latest web browser (Internet Explorer-5) supports it. The SEC may wish to wait until the direction the industry will take with respect to XML can be more clearly discerned.
It also will be essential SEC rules not permit textual narrative or numerical tables to be "hidden" as graphics or images (i.e., a numerical, financial table presented as an image) in either PDF files, or later, in HTML files. To do so, would completely destroy the usefulness of the EDGAR database.
Defining exactly what information should (or must) be presented as a graphic is probably better addressed through the SEC's Plain English initiative.
However, given the fact that even ASCII files of more than 20 megabytes have been submitted to the EDGAR system, it probably is not possible to set a maximum EDGAR file size. On the other hand, recent slowdowns during peak filing periods (especially the March 31, 1999 10-K peak), suggest the SEC will need to think seriously about ways of keeping file sizes manageable. Combined HTML and PDF submissions could easily overwhelm EDGAR during any heavy filing period unless significant system upgrades are also made. The SEC may even need to rethink its decision to accept both HTML and PDF formats, and settle on one HTML.
Internet-based filing will help with the communications aspects of getting large submissions to the SEC (since most firms are connected through T-1, or larger lines). It will not resolve the issues associated with internal acceptance and other processing that appears to be causing queuing problems on heavy filing days.
While it might not be possible to set a maximum EDGAR file size, it might be possible to set a limit on the size of a single HTML or PDF document.
The SEC is also right to be concerned about the time it will take individuals to download large files from either the SEC web site or from value-added resellers using dial-up networks. Our testing done with PCs of different configurations and on HTML files of various sizes across the Internet produced sufficiently serious concerns to suggest the SEC will need to move as quickly as possible to break HTML documents into smaller, more manageable, separate files.
While the need to protect both the SEC as well as filers is not in question, any implementation that reduces the current level of flexibility or is overly burdensome or poorly managed will not be acceptable.
Client-side certificates, while introducing non-repudiation, frankly, do not appear to be warranted. Although non-repudiation of an SEC filing, in and of itself, would be desirable, there is no evidence this is a problem EDGAR need address. Bogus filings were a possibility in paper (there were instances of such filings having been made), and are a possibility with the current EDGAR system (where there appear to have been none). The SEC has traditionally chosen to deal with the issue of false filing through reliance on the securities laws, and should continue with this approach.
In the event the SEC decides to implement client side certificates, it must be implemented in a manner that not only ensures filers are not disadvantaged and are able to acquire a certificate in a very rapid manner (one or two hours) when one is needed, the implementation must also adequately address the existing filing structure that permits agents to file on behalf of registrants.
With the percent attribute accepted, the screen resolution concern would apply primarily to graphics. Here, it makes sense to lower the standard to 640 by 480.
Two other items are also viewed as beneficial to improving the quality of HTML presentations: a) face attribute, and b) background color. The face attribute allows for the utilization of other typefaces while defaulting to Times Roman (in most cases) if the selected face does not exist in the user's system. Background color would allow table cells to be colored.
Again, Bowne & Co. appreciates the opportunity to comment on the SEC's proposed rules.