How A Company Files With The SEC

Domestic public companies, or those that wish to become public, must comply with several rules and regulations set forth by the Securities and Exchange Commission (SEC), a division of the federal government. Even foreign companies that list on exchanges in the United States must comply with SEC regulations, although the requirements may differ. Several rules have been established over the past eight decades to regulate the traded securities industry. These rules not only gave rise to guidelines for investment companies and investors, but also created a cache of documents that each company needs to create, file and maintain, some within a specified time frame, with the agency.

The Rules 

The first major regulation that established guidelines for security exchanges was the Securities Exchange Act of 1934. The purpose, according to the SEC, was to "provide regulation for and control transactions by all parties including company officers, to require appropriate reports, to create a national market system, to impose requirements necessary to make regulation and effect control, and to insure the maintenance of fair and honest markets."

Additional regulations include the Investment Company Act of 1940, whose purpose was to “eliminate the conditions which adversely affect the national public interest and the interest of investors,” and the Investment Advisors Act of 1940, which defined and regulated the brokers and dealers of securities. Another, the Securities Investor Protection Act of 1970, was enacted to protect customers or investors who used registered broker/dealers and purchased securities on national exchanges.

These are the major rules that were put in place, but there have been several amendments since - Regulation Fair Disclosure (Reg FD) in 2000, Sarbanes-Oxley Act of 2002 and Dodd-Frank Act of 2010. Each of these has the purpose of protecting the markets and consumers from issuing companies by ensuring the public data is trustworthy, the system is transparent and the issuing companies and broker/dealers are accountable for their actions.

Filing Data

Reg FD’s main purpose was to create a fair playing field for all investors so that when a company discloses material, non-public information to any one party, that information is made public to all. Companies can make information public in several ways - through postings on company websites, at industry conferences and with the SEC.

In 1993, the SEC created a system for companies to file documents electronically through its Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. According to the SEC, “This system is intended to benefit electronic filers, enhance the speed and efficiency of SEC processing, and make corporate and financial information available to investors, the financial community and others in a matter of minutes. Electronic dissemination generates more informed investor participation and more informed securities markets.” Companies and investors can access this system online through the EDGAR Filer Management website.

While seemingly making the process easier, the SEC has also created a vast catalog of forms that companies must file and maintain. The most common forms for investors are the annual report (Form 10-K), quarterly report (Form 10-Q), current report (Form 8K), statement of changes in beneficial ownership (Form 4), public resale of restricted or controlled securities if a number of conditions are met (Form 144) and registration statement (Form S4), just to name a few. The SEC requires that each of these filings be completed within a certain time frame, in part to protect and inform the investor on a timely basis.

The annual report (Form 10-K) must be filed 90 days after the company’s fiscal year ends. Sometimes companies have a different fiscal year than the calendar year (i.e. Company A has a fiscal year that ends June 30). The quarterly report (Form 10-Q) is required to be filed 45 days after the end of the quarter. Other forms need to be filed in a timely manner but do not have set times since they occur ad hoc.

The Bottom Line

EDGAR is a system created by the Securities and Exchange Commission to allow fair dissemination of information, as well as create a core repository to electronically deposit and obtain information. EDGAR improves the ease by which companies can file with the SEC. Most forms need to be filed electronically, but several, primarily related to temporary or permanent hardship, can be filed by hard copy. EDGAR is made available for all investors to access company filings and make informed investment decisions.

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