The SEC’s EDGAR System: Use It Fearlessly!

By Troy Adkins AAA

The Securities and Exchange Commission (SEC) was created in response to the Great Depression. Since 1934, the SEC has required corporations to file a host of forms and documents to comply with regulatory policy. Recognizing the anticipated growth in the SEC’s oversight responsibilities, in 1984 the SEC created the Electronic Data Gathering, Analysis and Retrieval (EDGAR) system to collect and make available electronic documents that provide investors with pertinent company information. Since 2006, the EDGAR system has also captured information about mutual funds and variable insurance products. The system now contains more than 20 million corporate filings in its database.

EDGAR's Purpose

The EDGAR system's purpose is to increase efficiency and fairness in the securities market for the benefit of investors, corporations and the economy. EDGAR accomplishes this goal by accelerating the receipt, acceptance, dissemination and analysis of time-sensitive information filed with the SEC. The system is available free to the public and can be accessed under the filings tab on the SEC website. Currently, the system is undergoing significant enhancements that are making it much more user-friendly. However, the EDGAR system should not be confused with the EDGAR Online website, which is not affiliated with or approved by the SEC.

Information Available Through EDGAR

In most cases, people will want to use the EDGAR system to review the following corporate forms:

  • Form 10-Q, which contains unaudited quarterly financial statements;
  • Form 10-K, which contains audited annual financial statements;
  • Form 8-K, which provides current information including preliminary earnings announcements; and
  • Forms S-1 and F-6 registration statements.

The EDGAR system also provides important information about:

  • Executive compensation, which can be found in Form 10-K, Schedule 14-A and registration statements;
  • Insider transactions and beneficial ownership interests, which can be found in Form 3;
  • Shareholder meetings and proxy solicitations that provide information about corporate matters that require shareholder vote, which can be found in Schedule 14-A and 14-C;
  • Business combinations that provide information about the person making a tender offer, which can be found in Form 14-D;
  • Initial public offerings, which can be found in Form S and Form F registration statements; and
  • Bankruptcy petition forms, which can be found in Form 8-K. (See EDGAR's complete index of forms here.)

In terms of mutual-fund and variable-annuity product information, the EDGAR system provides access to prospectuses, proxy-voting records and educational brochures that address the basics of mutual-fund and variable-annuity investing. Users can also subscribe to receive updated information about the most recent fund and annuity materials submitted to the EDGAR system.

How To Use EDGAR

The EDGAR system works in the most efficient and effective manner when people conduct a search by company name or by using the company’s central index key (CIK). The company’s name as reported on the SEC filings must be used when searching the EDGAR database. The system will also let people search for company information by ticker symbol, by country or state of locale or by industry. Disclosure information on the EDGAR system will vary based on the requirements at the time in which the documents were filed.

For people new to using the EDGAR system, it is important to note that EDGAR has undergone and is currently undergoing a host of enhancements that are making it much more user-friendly. For example, the system now has an interactive feature that allows people to select information from categorical tables of organization. This information can be exported into Microsoft Excel to facilitate a comprehensive financial analysis. The Excel file will include numerous sheets of data organized by topical category, such as a company’s consolidated statement of comprehensive income, consolidated balance sheet and consolidated statement of stockholders’ equity. By capturing this information in a single Excel file, users can conduct an expedited analysis and maintain organized records for historical reference.

In addition to the interactive feature available on the EDGAR system, it is important to note that the old HTML forms and documents are still available in file document format. Users can download these files to their computer. This is still a very important feature, because many of these documents are hundreds of pages long and include tables, graphs and charts. Therefore, the old document report format is still very useful, because people can use them to find information that is not typically organized and captured by the new interactive data format. For example, people can launch the 10K document report for a company, then select the keys “Ctrl and F” to search the document for key words that are much more specific than the broad-based interactive categories of organization. This, in turn, lets the user scan a comprehensive document in seconds to find the pages in which a given key word can be found. By utilizing this feature, people can conduct a comprehensive analysis in a minimal amount of time.

EDGAR Public Dissemination Service

EDGAR also offers a beneficial feature for people that conduct frequent analyses. This feature is known as the EDGAR Public Dissemination Service (PDS). Attain LLC is the primary contractor that supports the EDGAR PDS. The remote PDS receives a direct feed from the EDGAR host and initiates the real-time dissemination of forms to participating subscribers. People who subscribe to use the PDS will receive via email all public filings acquired and accepted by EDGAR at the same time as filings are sent to the SEC from EDGAR. They will also have access to archived data pertaining to all of the recently accepted and transmitted filings. They can receive secondary feeds available to subscribers at a significant price reduction from the cost of the primary feed, and they will have safeguards in place to help ensure that they receive all filing data.

EDGAR accepts and disseminates between 2,000 and 4,000 live public submissions per day during non-peak periods and between 4,000 and 12,000 live submissions per day during peak periods. Several peak submission periods throughout the calendar year include four 10-Q peak periods and one 10-K peak period. Only public documents are disseminated to subscribers, and all publicly available files are disseminated by the PDS. The SEC does not allow the PDS to disseminate specific files such as Form 10-Ks and Form 10-Qs. Thus, users will need to have software that allows them to parse out the files needed, as well as any reformatting and restructuring of data that is required. The cost for the software that will parse PDS data is in addition to the monthly cost of $1,476.15 that is charged to use the PDS.

The Bottom Line

The EDGAR system is one of the best sources for obtaining company, mutual-fund and annuity-product information. Given the EDGAR documents feature, EDGAR interactive feature and the comprehensive EDGAR PDS, corporate due diligence can be conducted in a very efficient and effective manner. This, in turn, means that people will be in a much better position to conduct a thorough and timely due-diligence analysis.

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