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The same adopting release that brings us mandated electronic filing of Form 144 also will require the electronic filing of the “glossy” annual report required under Exchange Act Rules 14a-3 and 14c-3. The glossy annual report that is sent to shareholders is required “furnished” for the information of the SEC, which for many years required issuers to mail the glossy annual report to the Commission.

I can recall that when I started in Corp Fin in the mid-1990s, we were inundated with seven copies of each public company’s glossy annual report. There were stacks of the annual reports lining the halls and file rooms because nobody really knew what to do with them. Someone came up with the idea of turning the covers of some annual reports into art work, and I recall them being hung on the wall of the large Corp Fin conference room at 450 5th Street.

The glossy annual report always had a sort of “square peg, round hole” problem with EDGAR because, by its very nature, the report was full of graphic and image material that old-school EDGAR could not handle. The shift to mandatory HTML for EDGAR filings back in 2017 paved the way for EDGAR to now handle more complicated documents, like the glossy annual report.

Back in 2016, the Corp Fin Staff took the perfectly reasonable approach of indicating that it would not object if a company posts an electronic version of its glossy annual report to its corporate website by the due date in lieu of mailing paper copies or submitting it on EDGAR if the report remains accessible for at least one year after posting. This approach seemed to work perfectly fine from my perspective, because as we all know the Staff has computers and they can go to a company’s website and peruse the glossy annual report just as easily as they could access it using EDGAR.

Unfortunately, it seems that the Staff’s interpretive slight of hand was not good enough for the Commission, as it will now require submission of the glossy annual report via EDGAR, while rescinding the Staff’s 2016 guidance. The new requirement will be effective six months after the effective date of these amendments, so just in time for the 2023 proxy season.

– Dave Lynn