The Securities and Exchange Commission Mandated EDGAR Filing for Foreign Private Issuers


The United States Securities and Exchange Commission (the SEC) approved a rule requiring foreign private issuers to file their securities documents with the SEC via the Electronic Data Gathering, Analysis and Retrieval (EDGAR) system. The rule institutes significant changes to current foreign private issuers' practice regarding SEC filing obligations. The goal in mandating EDGAR filing for foreign private issuers is to further facilitate the rapid dissemination of financial and business information about companies and other parties participating in the United States capital markets while making the SEC's processing of filings more efficient.

While domestic issuers have been required to make all of their filings electronically via EDGAR since 1993, foreign private issuers have been exempt from EDGAR filing requirements. A foreign private issuer is defined as an issuer that (i) is incorporated in a foreign country and has 50% or less of its voting securities held by United States residents or (ii) has more than 50% of its voting securities held by United States residents, but a majority of its executives are not United States citizens/residents, a majority of its assets are located outside of the United States and its business is principally administered outside the United States. The SEC initially excluded foreign private issuers from filing via the EDGAR process because of higher implementation costs for such issuers. However, advances in information technology have greatly reduced these costs.

Most SEC documents must be filed by EDGAR

Effective November 4, 2002 (roughly a six-month transition period), foreign private issuers will be required to file certain submissions, such as registration statements, annual reports and other periodic and current reports, via EDGAR instead of through paper filings.

Exhibits to SEC filings will have to be filed electronically as well. Exhibits which had previously been filed with the SEC in paper format and subsequently incorporated by reference into an EDGAR filing would not have to be refiled in EDGAR format, however, if a previously filed exhibit is being amended, the entire exhibit would have to be filed via EDGAR. In addition, if any portion of an annual or other report to security holders or any portion of a Form 6-K report is incorporated by reference in an electronic filing, the foreign private issuer must electronically file such portion of the document incorporated by reference. A foreign private issuer demonstrating certain specified hardships may request an exemption from the mandated EDGAR filing requirements, but the SEC states that it does not anticipate granting such exemptions frequently.

Treatment of Foreign Language Documents

All electronic filings and submissions to the SEC must be in the English language except in specified cases. In addition, to the extent any filing or submission requires inclusion of a document in a foreign language, the filer will in most cases be required to provide a complete English translation. English summaries of foreign language documents are acceptable but only under limited circumstances and then only in accordance with specified guidelines. Further, the SEC has provided for new rules specific to documents filed under Form 6-K by identifying when a filer must submit a full English translation versus an English summary.

When providing an English translation of a foreign language document, filers need not include a written representation by an officer certifying the fairness and accuracy of the English translation as previously required. In addition, filers may at their option submit an unabridged foreign language document to the SEC when electronically filing its English translation.

The new rule has also eliminated the requirement that a designated officer of the foreign private issuer certify in writing that a filed English translation is a fair and accurate translation of the applicable foreign language document.

How should you prepare for filing on EDGAR?

  1. Understand the new rule and your new obligations.
  2. Talk to your legal counsel about what EDGAR is and how the system works.
  3. Understand the costs associated with filing on EDGAR. Many EDGAR filers use financial printers to file their more complex filings and do their simple recurring filings themselves. Costs associated with filing in house include the purchase of compatible computer equipment and software, training or hiring employees to assist with EDGAR processing and the costs associated with formatting and transmitting documents to be filed on EDGAR. If you decide to hire a financial printer, you should get a quote from a number of financial printers. Your legal counsel can assist you in hiring a financial printer.
  4. Prepare early by contacting your legal counsel to assist you in applying for the appropriate access codes needed to file on EDGAR. In order to file with EDGAR, you will need to obtain various access codes including:
    1. A CIK (Central Index Key) is a unique, public number the SEC assigns to every registrant
    2. A CCC (CIK Confirmation Code) is used on each filing in combination with your CIK
    3. A Password is used to access the SEC's filer web site
    4. A PMAC is a Password Modification Authorization Code

This process is typically quite time consuming. We recommend you contact your legal counsel to begin the preparation for EDGAR filing as soon as possible.