Today, the Commission is considering a proposal under the Exchange Act to require broker-dealers and other registrants to submit forms electronically. I am pleased to support this proposal because, if adopted, it would advance the Commission’s efforts to modernize filing for a wide range of registrants.
We live in a digital age—paper certificates for U.S. treasuries have long been a thing of the past. Our markets and business models have been transformed by electronic trading, the cloud, artificial intelligence, and predictive data analytics. In 2023, one might think that all filings to the Commission already could be made electronically. That’s not yet true.
Today’s proposal builds on a long line of Commission actions. It was in February 1983—40 years ago last month—that Chairman Shad formed the first task force to explore the feasibility of an electronic disclosure system.[1] In April 1993, the Commission started to require electronic filings through the Electronic Data Gathering, Analysis, and Retrieval system, commonly known as EDGAR.[2] In the decades since, we have made numerous other changes to facilitate or require electronic filing and recordkeeping.[3] It was only in 2015, however, that brokers began electronically to file their annual audits with the Commission.[4]
Today, we have the important opportunity to require electronic filing for nearly all of the remaining paper filings required under the Exchange Act.
As proposed, the amendments would require entities under the Exchange Act to file electronically a range of annual and quarterly forms currently filed in paper. For example, brokers and other filers would need to submit electronically their annual audit filings and risk assessment reports. Streamlining the Commission’s filing and processing, this also would help us more quickly analyze filings to ensure compliance with Congress’s laws and our rules.
I believe the proposal, if adopted, would save both registrants and the Commission time and resources. We oversee more than 3,500 broker-dealers, the vast majority of which submit annual audit reports. While many filers voluntarily submit these audits electronically, nearly half submitted them on paper last year. These filings may run as long as 100 pages.
If adopted, the proposal would modernize how the Commission processes these important filings from brokers and other registrants.
I’d like to thank the members of the SEC staff who worked on this proposal, including:
- Haoxiang Zhu, Raymond Lombardo, Valentina Deng, Patrick Bloomstine, Edward Cho, David Dimitrious, Deborah Flynn, Lourdes Gonzalez, John Guidroz, Haley Holliday, Molly Kim, Matthew Lee, Katherine Lesker, Russell Mancuso, Cristie March, Carol McGee, David Michehl, Catherine Moore, Michou Nguyen, Claire Noakes, Susan Petersen, Justin Pica, David Remus, Kelly Shoop, Rose Wells, David Saltiel, Andrea Orr, Laura Compton, Roni Bergoffen, and Jennifer Colihan in the Division of Trading and Markets;
- Jessica Wachter, Charles Lin, Parhaum Hamidi, Juan Echeverri, Julie Marlowe, Rebecca Orban, Gregory Scopino, Mike Willis, Lauren Moore, and Jill Henderson in the Division of Economic and Risk Analysis;
- Megan Barbero, Meridith Mitchell, Malou Huth, Robert Teply, Leila Bham, Maureen Johansen, Melinda Hardy, and Mark Tallarico in the Office of the General Counsel;
- Todd Canali, Paul Gross, Jane Patterson, and Sylvia Pilkerton in the EDGAR Business Office;
- Ryan Ames, Juanita Bishop Hamlett, and Carrie O’Brien in the Division of Examinations; and
- Melissa Robertson in the Division of Enforcement.
[1] See Securities and Exchange Commission, “EDGAR: A Status Report” (Dec. 31, 1985), available at https://theexchange.sec.gov/media/4231/download. E.g., “In February 1983, the Chairman formed a staff task force to explore the feasibility of an electronic disclosure system. The task force sought information from the public regarding the availability, cost, structure and feasibility of such a system. – 1/ A series of meetings were held with interested parties, and the MITRE Corporation – 2/ was hired to provide technical assistance.”
[2] See Securities and Exchange Commission, “EDGAR Status Report” (Dec. 31, 1993), available at https://theexchange.sec.gov/media/4181/download. E.g., “Three groups of mandated filers were phased onto the EDGAR system. … These three groups, along with phase-in group 1, which consisted of former Pilot system filers who began live filing on a mandatory basis on April 26, 1993 (plus a few volunteers), make up the significant test group mandated by Congress.”
[3] In 1997, for example, the Commission began allowing brokers to use electronic recordkeeping for books and records, a rule the Commission later amended and modernized in 2022. See Gary Gensler, “Statement on Final Rule Amendments to Electronic Recordkeeping Requirements” (Oct. 12, 2022), available at https://www.sec.gov/news/statement/gensler-statement-electronic-recordkeeping-requirements-101222. As another example, in 2004, the Commission implemented electronic filing requirements for self-regulatory organizations’ proposed rule changes through the Electronic Form 19b-4 Filing System (EFFS). See Securities and Exchange Commission, “Proposed Rule Changes of Self-Regulatory Organizations” (Oct. 4, 2004), available at https://www.sec.gov/rules/final/34-50486.htm.
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