A year after publishing proposed rules, on September 27, 2024, the SEC adopted rule and form amendments to the EDGAR system dubbing the updates as EDGAR Next (for a review of the proposed rules see HERE). The rule changes are meant to enhance security and improve access to the EDGAR system. My view is that will accomplish the former and not the latter. The changes require EDGAR filers to authorize identified individuals who are responsible for managing the filers’ EDGAR accounts. Individuals acting on behalf of filers on EDGAR will need individual account credentials to access those EDGAR accounts and make filings.
The new rules amend Rules 10 and 11 of Regulation S-T and amend Form ID. Only the identified authorized individuals will be able to access a filer’s EDGAR account. The authorized individual(s) need not be an employee of the filer, but the filer needs to provide a notarized power of attorney to appoint someone.
Through the new software, a filer will have a dashboard for their EDGAR account. On the dashboard, account administrators can take actions on behalf of the filer to add and remove authorized users, account administrators, and technical administrators; and annually confirm the accuracy of the filer’s information on the dashboard. Under the new rules, each EDGAR filer will be required to maintain current accurate information about the filer and its authorized administrator.
Also, on the dashboard, account administrators can delegate authority to file on behalf of the filer to any other EDGAR account, such as a filing agent, making that account a delegated entity of the filer, and can remove a delegated entity’s authority to file on the filer’s behalf. The filing agent, like any other EDGAR filer, will also need to have appointed individual authorized administrators. The filing agent can process filings through its own dashboard and not the main filer’s dashboard.
The SEC will also offer optional APIs allowing filers to make submissions, retrieve information and perform account management tasks with minimal manual interaction with EDGAR. On September 30, 2024, the SEC will open a filer testing and feedback beta software reflecting the new rules and form changes. A company using the API will need to authorize two individuals to be technical administrators to manage the API.
I suspect this will increase the costs associated with EDGAR filings as filers will likely still use EDGAR filing agents who in turn will have to maintain more complex controls and procedures, especially over individual staff, in managing multiple accounts.
From September 30, 2024, through March 21, 2025, filers can prepare for the changes by testing in and modifying their internal software systems to work with the EDGAR Next system. On Monday March 24, 2025, a new EDGAR Next dashboard will go live and compliance with amended Form ID as well as all other rule and form amendments will go be effective. However, full compliance will not be required until September 15, 2025.
Background
Currently a filer gains access to the EDGAR system by completing and submitting an online fillable Form ID. The Form ID requires the applicant’s name and contact information, the applicant’s point of contact for EDGAR information, inquiries, and access codes (“EDGAR POC”), its contact for SEC account information and billing invoices (“billing contact”) and a passphrase. Upon approval the SEC will issue a a central index key number (“CIK”) unique to that filer, access codes (called central index key confirmation code (“CCC”)), and a password modification authorization code (“PMAC”). Any person with the access codes would have the ability to make filings on EDGAR for that EDGAR filer.
Although a filer is required to maintain their codes in a secure location, in practice many do not. Moreover, many companies provide multiple individuals and/or filing agents with their codes with no real traceability.
In 2021, the SEC issued a Request for Comment on Potential Technical Changes to EDGAR Filer Access and Filer Account Management Processes (“2021 Request for Comment”). The 2021 Request for Comment sought comments on many items including the addition of individual account credentials with multi-factor authentication, a dashboard on EDGAR where a filer would manage its EDGAR account, administrators to manage the filer’s account and annually confirm the filer’s information, and the time period required to implement the potential technical changes, all of which are part of the new proposed rule changes.
Final Rule Changes
The SEC has implemented amendments to Rule 10 under Regulation S–T concerning EDGAR filer access and account management and related matters; Form ID, the application for EDGAR access; and Rule 11 under Regulation S–T, containing the definitions of terms in Regulation S–T. Amendments to Rule 10 and Form ID set forth requirements for each EDGAR filer to authorize and maintain individual account administrators to manage the filer’s EDGAR account on a dashboard on EDGAR, and to authorize account administrators, users, and technical administrators only if those individuals obtained individual account credentials.
Each filer, through its account administrators, is required to confirm annually that all account administrators, users, technical administrators, and delegated entities reflected on the filer’s dashboard are authorized by the filer to act on its behalf, and that all information about the filer on the dashboard is accurate; maintain accurate and current information on EDGAR concerning the filer’s account; and securely maintain information relevant to the ability to access the filer’s EDGAR account.
On the dashboard, account administrators can add and remove authorized users, account administrators, and technical administrators; delegate and remove delegated authority to file to other EDGAR accounts; and annually confirm the accuracy of all information on the dashboard. The SEC is also providing an optional API for machine-to-machine communication with EDGAR, including to submit filings. To use APIs, filers will be required to authorize two technical administrators and present certain tokens to EDGAR (the SEC giving an example of a “utility token!”).
An account administrator will be able to delegate authority to make filings on behalf of an EDGAR filer. Delegated entities will be required to comply with the same requirements applicable to all filers. Delegated entities generally will include EDGAR filing agents, issuers and others making submission on behalf of individuals pursuant to Section 16 of the Exchange Act and parent companies handling the filings for subsidiaries.
If a delegated entity accepts a delegation from a filer, the delegated administrators can authorize specific users at the delegated entity to become delegated users with respect to that filer. If delegated administrators wants all of their users to become delegated users with respect to a filer, the delegated administrators can check a box to automatically designate all of the users at the delegated entity as delegated users for the filer.
The Author
Laura Anthony, Esq.
Founding Partner
Anthony, Linder & Cacomanolis
A Corporate and Securities Law Firm
Securities attorney Laura Anthony and her experienced legal team provide ongoing corporate counsel to small and mid-size private companies, public companies as well as private companies going public on the Nasdaq, NYSE American or over-the-counter market, such as the OTCQB and OTCQX. For more than two decades Anthony, Linder & Cacomanolis, PLLC has served clients providing fast, personalized, cutting-edge legal service. The firm’s reputation and relationships provide invaluable resources to clients including introductions to investment bankers, broker-dealers, institutional investors and other strategic alliances. The firm’s focus includes, but is not limited to, compliance with the Securities Act of 1933 offer sale and registration requirements, including private placement transactions under Regulation D and Regulation S and PIPE Transactions, securities token offerings and initial coin offerings, Regulation A/A+ offerings, as well as registration statements on Forms S-1, S-3, S-8 and merger registrations on Form S-4; compliance with the Securities Exchange Act of 1934, including registration on Form 10, reporting on Forms 10-Q, 10-K and 8-K, and 14C Information and 14A Proxy Statements; all forms of going public transactions; mergers and acquisitions including both reverse mergers and forward mergers; applications to and compliance with the corporate governance requirements of securities exchanges including Nasdaq and NYSE American; general corporate; and general contract and business transactions. Ms. Anthony and her firm represent both target and acquiring companies in merger and acquisition transactions, including the preparation of transaction documents such as merger agreements, share exchange agreements, stock purchase agreements, asset purchase agreements and reorganization agreements. The ALC legal team assists Pubcos in complying with the requirements of federal and state securities laws and SROs such as FINRA for 15c2-11 applications, corporate name changes, reverse and forward splits and changes of domicile. Ms. Anthony is also the author of SecuritiesLawBlog.com, the small-cap and middle market’s top source for industry news, and the producer and host of LawCast.com, Corporate Finance in Focus. In addition to many other major metropolitan areas, the firm currently represents clients in New York, Los Angeles, Miami, Boca Raton, West Palm Beach, Atlanta, Phoenix, Scottsdale, Charlotte, Cincinnati, Cleveland, Washington, D.C., Denver, Tampa, Detroit and Dallas.
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