Financial Transactions and Regulatory Compliance Review

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Can you Guess the Average Time Burden for a Registrant to Hyperlink an Exhibit?

The growth of digital tools and fintech is rapidly transforming the financial industry. Gradually, the industry's main regulator, the SEC, is also taking advantage of these new technologies, both for its own benefit and for filers. By adopting innovative digital solutions, including Inline XBRL, hyperlinks for exhibits, and an updated EDGAR system, the SEC is attempting to make structured financial data more widely available and efficient to access.

In order to find out the benefits and challenges associated with these changes, Toppan Vintage commissioned Mergermarket to interview five industry experts for their insights.

Toppan Vintage question: Do you think the final rule governing hyperlinks went far enough? Do you think other information in company filings should be required to be linked to electronic exhibits/source files? Dealmakers weigh in...

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Jay Knight: I do think the use of additional hyperlinking should be explored further. There is a great deal of information that could be hyperlinked in a particular filing, whether or not it's a Securities Act registration statement that's incorporating Exchange Act filings such as the 10-K and Qs. And I do think there are more hyperlink opportunities for issuers that would not be a significant burden and could provide a lot of benefit to investors. 

At the same time, I think we have to be careful not to make the documents so complex that the benefit to investors becomes outweighed by the cost of companies trying to hyperlink absolutely everything in the document. You don't want it to become too complex, because documents can lose readability at times if the hyperlinking is taken to the extreme. 

There is also this overlay of the disclosure reform project that the Commission has been undertaking in recent years to try to improve disclosures for investors. I think this idea would fall under that framework.

Hyperlink Participants-1.jpgTaavi Annus: It has been discussed whether there are other parts of the filings that companies should add hyperlinks to. But the advantage of limiting hyperlinks to the exhibits is that any hyperlinks would be to another SEC filing, so they’re part of a closed system that does not change. If you start adding hyperlinks to any kind of outside sources, then there is a major risk that those hyperlinks will become out of date or inaccurate, or will be deleted and the hyperlink will take you nowhere. Thus, any hyperlinks outside this closed SEC system carry two types of risk for the companies. 

The first is an investor-relations risk, if investors can't find what they are looking for or if something is incorrect. But then there’s also liability risk. If something links to an updated page, a company could be making misleading disclosures. What could be done, as Jay mentions, is to add hyperlinks to other sections of the SEC filing that do not link to outside sources. The documents often have cross-references to other sections, for example, or the document may have references to other SEC-filed documents. That could potentially be a place where companies could add hyperlinks.  


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The growth of digital tools and fintech is rapidly transforming the financial industry. Gradually, the industry's main regulator, the SEC, is also taking advantage of these new technologies, both for its own benefit and for filers. By adopting innovative digital solutions, including Inline XBRL, hyperlinks for exhibits, and an updated EDGAR system, the SEC is attempting to make structured financial data more widely available and efficient to access.

Toppan Vintage

Toppan Vintage is a leading international financial printing, communications and technology company dedicated to delivering a hassle-free experience with the highest quality accuracy, reliability and value for your organization’s financial printing and communications needs.

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