October 20, 2021

Links Have Consequences

A ubiquitous feature of this blog, and so many things that we encounter on a daily basis, is the embedded hyperlink. Embedded hyperlinks make things so easy for us – we can move from what we are reading directly to some related information so that we no longer have to bother looking things up on our own. But when it comes to SEC filings, it is always important to remember that links have consequences.

This topic was addressed during the panel “Creative Proxies: Tips to Optimize Communications” during the first day of last week’s Proxy Disclosure Conference. While there is often a desire to treat SEC filings like other communications and use hyperlinks as a means to improve the user experience, it is important to consider the liability implications that arise from linking to any material outside of the filing. The issue comes up these days when, for example, a company may want to reference the company’s ESG report in the Form 10-K or proxy statement, given the important information that is included in that external document.

In this recent SEC Institute blog, George Wilson notes the risk associated with mentioning or hyperlinking to information outside of an SEC filing:

In a recent Workshop, one of our participants asked about the pros and cons of mentioning or linking to a separate ESG report in Form 10-K. One of the risks in such a reference is that the ESG report could become part of the Form 10-K and become “filed” information. This would potentially subject the information in the ESG Report to the liability provisions set forth in section 18 of the 1934 Act and, if the 10-K is incorporated by reference into a 1933 registration statement, the strict liability provisions of section 11 of the 1933 Act. Neither of these outcomes would be advisable for all the information in an ESG report.

Keep in mind that Rule 105(b) of Regulation S-T states that “electronic filers may not include in any HTML document hyperlinks to sites, locations, or documents outside the HTML document, except links to officially filed documents within the current submission and to documents previously filed electronically and located in the EDGAR database on the Commission’s public Web site (”

My advice – when in doubt, don’t hyperlink and be cautious about references to information included on the company’s or other websites! SEC reporting companies are now required to link to certain specific information in SEC filings, but outside of those circumstances, there is never a good reason to include an active hyperlink to external material.

– Dave Lynn