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I have to admit that I am kind of excited about seeing glossy annual reports on EDGAR. While it is unfortunate that clients now have to contend with yet another filing requirement, it is interesting to see these often highly stylized reports collected in one place that is relatively easily searchable.

My affinity for glossy annual reports traces back to my early days in Corp Fin at the SEC, when issuers were obligated to mail seven copies of the glossy annual report “for the information of the Commission.” One might ask, why were seven copies of the glossy annual report required, when just one would probably do the trick? I have no idea, I never went back to do the research, but in the old paper filing days, the filing rules typically called for the filing of multiple copies of the same document so that copies could be provided to various members of the filing review team. This glossy annual report submission requirement provided me with an early lesson in the unintended consequences of rulemaking.

As I reminisced in a blog back in June when this rule change was adopted, during the proxy season each year, glossy annual reports would come flooding in by the sevens, but there was basically no where to put them and no interest on the part of the Staff in reviewing them. Our administrative assistants would grumble loudly about the onslaught and would try in vain to cram the glossies into filing cabinets, but inevitably stacks of glossy annual reports would pile up in the file rooms, around desks and in various other corners of our office “pod.” Enterprising staffers would use the glossies to prop open doors, elevate their computer monitors and shim up wobbly desks. For some reason the concept of “keep one and throw away the other six” never seemed to cross anyone’s mind.

By far the best use of the glossy annual reports that flooded the Commission’s hallways each Spring was the effort undertaken by a group of Corp Fin Staffers who recognized the beauty in these documents and transformed them into works of art for the wall of the fourth floor Corp Fin conference room at the SEC’s old 450 5th Street building. One wall of the conference room was filled with the covers from glossy annual reports, and I have a lot of fond memories from that conference room that I associate with the glossy cover art on the wall. I don’t think that was what the Commission was thinking when it adopted the requirement to submit seven copies of the glossy annual report to the SEC, but at least there was one small positive unintended consequence from the SEC’s rulemaking!

– Dave Lynn