Recently, the SEC Staff posted the archive of a video they just made about EDGAR Next that included a number of questions that were submitted live via chat and answered by the Staff. These questions are answered starting at the 50:42 mark of the video, going all the way to the 1:35:00 mark.
In total, five questions were answered. I’ve taken the transcript for those five questions and cleaned them up to the best of my abilities as follows – the questions were submitted live during the webcast via chat. And recently Cooley’s Luci Altman gave us these five issues that might arise and she has now added some color commentary to these FAQs as noted in the brackets below:
- Is it recommended that a director who sits on multiple boards have one person from each public company act as an account administrator?
Staff: We are trying to not be prescriptive here, but provide filers, filing agents and law firms the flexibility they need to sort of tailor things based on what they think is appropriate and what they’re comfortable with. I think one solution is there could be an account administrator from each company for the Section 16 filer there – or the Section 16 filer there could say, ‘look, you know, I have a principal person, my right-hand person by presenting an account administrator, they’re going to handle everything and everyone needs to go coordinate with them.’
There are multiple ways that could be done. There’s not a specific prescriptive outcome that we’re mandating here.
[Luci Altman: The Staff has been consistent in not taking a position on how filers should set up their accounts. Note that we believe that for filers on multiple boards, it is best to have an account administrator at each company. One account administrator (the right-hand person) can be the SEC point-of-contact and handle the annual certification, but if there is an account administrator from each company, than that account administrator can handle setting up the required delegations for that company directly into the filers dashboard and will not have to send all the information to the “right-hand” account administrator for them to enter.]
2. In the current Form ID questionnaire, the title field of limit to 60 characters and I experience this limitation has often been the most common reason for a Form ID rejection since we’re not able to include the full and accurate title of the authorized signatory. Could you clarify whether there is a plan to expand this field or to provide guidance on how far to handle longer accurate titles within this constraint?
Staff: It’s fine to use abbreviation to shorthand. For example, use shorthand for the title of the person signing the Form ID. An example is you can use “CEO” instead of spelling out ‘chief executive officer.’
It’s a known frustration and we’re looking into changing that character field so it can be less frustrating. In the interim, use reasonable abbreviations. We’ll understand what that means.
3. About the SEC review process, Form IDs used to only take a few days for the Staff to process, but after the new platform’s adoption, this process has taken two to three weeks or longer in some cases. What’s the plan to improve these wait times, especially considering the inevitable influx of submissions that will come after the enrollment deadline?
Staff: Throughout the federal government there was a loss of personnel this spring and so we did lose personnel at the same time as we were transitioning to Edgar Next. So there have been other reasons why there may have been some longer wait times.
However, we are adding staff now and wait times are improving. I would suggest that folks look very carefully at their applications because I understand that the longer wait times usually occur because there was some error and the application has to be reviewed more carefully.
So that does increase the length of review. So I would urge you to watch our instructional videos and follow the instructions very carefully when submitting Form ID.
[Luci Altman: Our experience is that it’s taking the Staff about 7-8 business days to process Form IDs – and we have seen the longer delays if there were errors made in filling out the Form ID initially – which with the new Form – has been happening a fair amount.]
4. For Section 16 officers that the issuer company manages the filings for, beyond having account administrators at the issuer company, can the company CI add a delegate in order successfully followed by the current admin or user?
Staff: So it’s a little hard to parse what they’re asking, but essentially if you want someone else to file for you, they need to have permission. So either they need to be a delegated user, a delegated admin, or they need to be a user or an account admin.
If you want someone else to file for you, whether they’re the issuer for which you’re essentially an officer, whether they’re a law firm, whether maybe it’s a broker-dealer, you need to delegate to them or else individually have that specific person add to your account as a user account admin. You have the choice there.
[Luci Altman: We believe it is wise to move authorizations to the delegated entity level rather than leaving it at the individual user level whenever possible to allow for more flexibility. The point being that if an individual is authorized and that individual is not available, no one else can file; if an entity is delegated, any user that entity has delegated to can make a filing.]
5. There are multiple questions about people that don’t have current codes and can’t access the e-mail.
Staff: Unfortunately, the answer is if you can’t do one or the other of either resetting the codes or changing the e-mail, you’re going to have to submit on Form ID for an existing CIK. And please do it well in advance of whenever you need to make a filing.
And just to clarify that the first option should always be to reset the codes. And the way you can do that is to reset the e-mail. I would definitely try that first.
If you can’t do that, then go ahead and file Form ID. But because Form ID is relatively streamlined, it will take you some time to fill out and then it will take some time for staff review, which could be a couple days or more.
So if you can reset the codes yourself, it’ll be unrolled within seconds. It’s much, much faster soon. Basically do that yourself if you’re able to do so.
For those that don’t have codes and don’t have an e-mail, see if there’s anybody that you have filed with that has active codes so that they can change the POC e-mail. So you can use the tokens, the filing agents, a prior law firm, you’ve worked with them before, they may still have it and can help you change the POC e-mail so you can get the CCC and pass phrase.
So try to coordinate. You don’t want to submit the whole thing. But if you cannot find any other way, yes, unfortunately the only way to do it is to change the email. So try hard and we do have guidance on our Edgar next page including a PDF entitled “Reset Your Edgar Passphrase.”
Beginning September 15th, if you do not have access to your POC e-mail, it becomes much more difficult to change with the access codes. We do have guidance coming on how to do that. But the point is, please, please, please make sure that you have access to your point of contact e-mail address before September 15th. That is the one thing that even unenrolled filers must do now before September 15th.
[Luci Altman: This is a really important point – and we have been stressing it as well, including not to rely on the September 15th to December 19th grace period.]
Authored by
Broc Romanek