[Federal Register Volume 85, Number 181 (Thursday, September 17, 2020)]
[Proposed Rules]
[Pages 58018-58023]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2020-18825]


=======================================================================
-----------------------------------------------------------------------

SECURITIES AND EXCHANGE COMMISSION

17 CFR Part 232

[Release Nos. 33-10821, 34-89633, 39-2532, IC-33974, S7-11-20]
RIN 3235-AM77


Administration of the Electronic Data Gathering, Analysis, and 
Retrieval System

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

-----------------------------------------------------------------------

SUMMARY: We are publishing for comment a proposed new rule under 
Regulation S-T. The proposal would specify several actions that the 
Commission, in its administration of the Electronic Data Gathering, 
Analysis, and Retrieval system (``EDGAR''), may take to promote the 
reliability and integrity of EDGAR submissions. In addition, the 
proposed rule would set forth a process for the Commission to notify 
filers and other relevant persons of its actions under the proposed 
rule as soon as reasonably practicable.

DATES: Comments should be received on or before October 19, 2020.

ADDRESSES: Comments may be submitted by any of the following methods:

Electronic Comments

     Use the Commission's internet comment form (https://www.sec.gov/rules/proposed.shtml); or
     Send an email to rule-comments@sec.gov. Please include 
File Number S7-11-20 on the subject line.

Paper Comments

     Send paper comments to Vanessa A. Countryman, Secretary, 
Securities and Exchange Commission, 100 F Street NE, Washington, DC 
20549.

All submissions should refer to File Number S7-11-20. This file number 
should be included on the subject line if email is used. To help us 
process and review comments more efficiently, please use only one 
method of submission. We will post all comments on our website (http://www.sec.gov/rules/other.shtml). Comments also are available for website 
viewing and printing in the Commission's Public Reference Room, 100 F 
Street NE, Washington, DC 20549, on official business days between the 
hours of 10:00 a.m. and 3:00 p.m. Eastern Time. All comments received 
will be posted without change. Persons submitting comments are 
cautioned that the Commission does not redact or edit personal 
identifying information from comment submissions. Please submit only 
information that you wish to make available publicly.
    We or the staff may add studies, memoranda, or other substantive 
items to the comment file during this rulemaking. A notification of the 
inclusion in the comment file of any such materials will be made 
available on our website. To ensure direct electronic receipt of such 
notifications, sign up through the ``Stay Connected'' option at 
www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT: Rosemary Filou, Chief Counsel; Monica 
Lilly, Senior Special Counsel; or Jane Patterson, Senior Counsel; EDGAR 
Business Office at 202-551-3900, Securities and Exchange Commission, 
100 F Street NE, Washington, DC 20549.

SUPPLEMENTARY INFORMATION: We are proposing to add 17 CFR 232.15 (new 
``Rule 15'') to Regulation S-T, General Rules and Regulations for 
Electronic Filings.\1\
---------------------------------------------------------------------------

    \1\ 17 CFR 232.10 et seq.
---------------------------------------------------------------------------

I. Introduction

    In 1993, the Commission adopted rules mandating that certain 
filings be made with the Commission electronically through the newly 
launched EDGAR system.\2\ Since then, the Commission has further 
prescribed requirements and procedures for EDGAR submissions.
---------------------------------------------------------------------------

    \2\ See, e.g., Release No. 33-6977 (Mar. 18, 1993) [58 FR 14628] 
(establishing rules and procedures applicable to electronic 
submissions processed by the Divisions of Corporation Finance and 
Investment Management); Release No. IC-19284 (Mar. 18, 1993) [58 FR 
14848] (adopting electronic submission filing rules applicable to 
investment companies and institutional investment managers under the 
Investment Company Act of 1940 (``Investment Company Act'') and the 
Securities Exchange Act of 1934 (``Exchange Act'')); and Release No. 
33-6986 (Apr. 9, 1993) [58 FR 18638] (adoption of the EDGAR Filer 
Manual).
---------------------------------------------------------------------------

    Regulation S-T addresses, among other things, certain 
administrative issues related to EDGAR submissions. For example, Rule 
13 of Regulation S-T allows a filer to request that the Commission 
adjust a filing date when the filing is delayed due to technical 
difficulties beyond the filer's control.\3\ In addition, pursuant to 
Rule 106, the Commission may remove from EDGAR an entire accepted 
submission or document if it contains executable code.\4\ Regulation S-
T further allows a filer to submit an amendment or a notice of 
withdrawal of the filer's submission to remedy a submission issue 
(``filer corrective disclosure'').\5\
---------------------------------------------------------------------------

    \3\ See 17 CFR 232.13(b).
    \4\ See 17 CFR 232.106. Rule 106 of Regulation S-T prohibits 
submissions to EDGAR that contain executable code, and indicates 
that attempted submissions identified as containing executable code 
will be suspended unless the code is in a PDF document that may be 
deleted.
    \5\ Regulation S-T anticipates that filers may address their own 
substantive, and in some cases, administrative, submission issues 
through filer corrective disclosure. See, e.g., 17 CFR 232.103 
(providing that filers are not subject to the liability and anti-
fraud provisions of the federal securities laws with respect to 
errors or omissions resulting solely from electronic transmission 
errors beyond the control of the filer if such filer files an 
amendment as soon as reasonably practicable after becoming aware of 
the error or omission); 17 CFR 232.105, Instruction 2 to paragraph 
(d) (providing that filers must correct an inaccurate or 
nonfunctioning link or hyperlink to an exhibit in certain 
circumstances by filing an amendment to the registration statement 
containing the inaccurate or nonfunctioning link or hyperlink); 17 
CFR 232.501(a)(3) and 17 CFR 232.501(b)(3) (providing that filers 
may correct or amend a modular submission or a segmented filing only 
by resubmitting the entire modular submission or segmented filing).
---------------------------------------------------------------------------

    In recent years, as the volume of EDGAR submissions has grown, the 
Commission has increasingly confronted administrative issues that 
impact the Commission's ability to promote the reliability and 
integrity of EDGAR submissions and that are not easily addressed by 
existing rules or filer corrective disclosure. When these issues arise, 
they can create confusion for filers, investors, and other users of 
EDGAR. To promote the reliability and integrity of EDGAR submissions 
and to provide transparency about our practices, we are proposing to 
specify actions that the Commission may take to facilitate the 
resolution of such issues. The proposed rule would confirm and clarify 
the Commission's existing approach to addressing the administrative 
issues that arise in connection with EDGAR submissions.
    Specifically, proposed Rule 15 would provide that in its 
administration of EDGAR, the Commission may take the following actions 
to promote the reliability and integrity of EDGAR submissions: \6\
---------------------------------------------------------------------------

    \6\ The Commission may delegate certain functions of proposed 
Rule 15 to the Commission staff.

---------------------------------------------------------------------------

[[Page 58019]]

     Redact, remove, or prevent dissemination of sensitive 
personally identifiable information that if released may result in 
financial or personal harm;
     prevent submissions that pose a cybersecurity threat;
     correct system or Commission staff errors;
     remove or prevent dissemination of submissions made under 
an incorrect EDGAR identifier;
     prevent the ability to make submissions when there are 
disputes over the authority to use EDGAR access codes;
     prevent acceptance or dissemination of an attempted 
submission that it has reason to believe may be misleading or 
manipulative while evaluating the circumstances surrounding the 
submission; and allow acceptance or dissemination if its concerns are 
satisfactorily addressed;
     prevent an unauthorized submission or otherwise remove 
related access; and
     remedy similar administrative issues relating to 
submissions.
    In addition, the proposed rule would set forth a process for the 
Commission to notify filers and other relevant persons of its actions 
under the proposed rule as soon as reasonably practicable.
    The proposed rule would not change filers' obligations under the 
federal securities laws to ensure the accuracy and completeness of 
information in their EDGAR submissions. Moreover, in the vast majority 
of administrative and substantive EDGAR submission issues, filers would 
continue to address an error by submitting a filer corrective 
disclosure.\7\ We intend to continue to rely upon filer corrective 
disclosure to remedy most submission errors.
---------------------------------------------------------------------------

    \7\ See, e.g., 17 CFR 232.103, 232.105 and 232.501(a)(3).
---------------------------------------------------------------------------

II. Discussion of the Proposed Rule

    Proposed Rule 15 would specify that in its administration of EDGAR, 
the Commission may take actions to promote the reliability and 
integrity of EDGAR submissions. The following is a discussion of the 
types of actions the Commission may take pursuant to the proposed rule 
to achieve those objectives.

A. Sensitive Personally Identifiable Information

    Proposed Rule 15(a)(1) would specify that the Commission may (i) 
redact submissions containing personally identifiable information that 
if released may result in financial or personal harm to an individual 
(``Sensitive PII''); (ii) remove submissions containing Sensitive PII; 
and/or (iii) prevent dissemination of submissions containing this 
information.\8\ When such steps are taken, the Commission may 
communicate as necessary with the filer to facilitate submission of a 
version in which such information is redacted.
---------------------------------------------------------------------------

    \8\ Sensitive PII may comprise a single item of information (for 
example, a Social Security Number) or a combination of two or more 
items (for example, a full name and financial, medical, criminal, or 
employment history). See proposed Rule 15(a)(1).
---------------------------------------------------------------------------

    The Commission has sought to reduce the risk that Sensitive PII 
included in EDGAR submissions may result in financial or personal harm 
to individuals. For example, in April 2018, the Commission adopted 
amendments to certain SEC forms to eliminate any reference to or 
request for Sensitive PII.\9\ The amendments eliminated form fields 
requesting Social Security numbers and other Sensitive PII that the 
Commission indicated could create ``costs [for filers] related to 
ongoing identity protection and monitoring, as well as reputational 
costs, operational costs, and losses from theft in the event 
misappropriated PII is used by bad actors.'' \10\ Similarly, the 
proposed rule would clarify that the Commission may take further steps 
to ensure that Sensitive PII does not reside in EDGAR and communicate 
as necessary with filers to facilitate submissions in which Sensitive 
PII is redacted.\11\ Whether the Commission removes, redacts, or 
prevents dissemination of the Sensitive PII in the submission would be 
based on when the Commission first becomes aware of the Sensitive PII.
---------------------------------------------------------------------------

    \9\ See Amendments to Forms and Schedules to Remove Provision of 
Certain Personally Identifiable Information, Release No. 33-10846 
(Apr. 25, 2018) [83 FR 22190] (``PII Form Amendments Release'') 
available at https://www.sec.gov/rules/final/2018/33-10486.pdf.
    \10\ Id. at 4-5.
    \11\ Although the Commission may take steps to ensure that 
Sensitive PII does not reside in EDGAR, the burden of the 
responsibility to redact such information from submissions continues 
to lie with the filer and not the Commission.
---------------------------------------------------------------------------

B. Cybersecurity Threats

    Proposed Rule 15(a)(2) would specify that the Commission may 
prevent the submission to EDGAR of any submission that poses a 
cybersecurity threat, including but not limited to, those containing 
any malware or virus, and communicate as necessary with the filer 
regarding the submission. Commission action to address cybersecurity 
threats in EDGAR submissions should benefit all EDGAR users and promote 
the reliability and integrity of EDGAR submissions.

C. System and Commission Staff Errors

    Proposed Rule 15(a)(3) would specify that if the Commission 
determines that a submission has not been processed by EDGAR, or has 
been processed incorrectly by EDGAR or contains an error attributable 
to the Commission staff, the Commission may correct and/or prevent 
dissemination of the submission and communicate as necessary with the 
filer to facilitate filer corrective disclosure. In each of these 
circumstances, under the Commission's existing practice, the Commission 
first attempts to correct the error without unduly burdening filers. 
Most frequently, for submissions not processed by EDGAR, for example, 
due to a system outage, the Commission may assign the filing date that 
would have been received had the EDGAR outage not occurred, without 
first communicating directly with the filer. For other isolated system 
or staff errors, such as when the Commission determines a filing was 
not processed correctly, the Commission may also resolve the error 
without contacting the filer. When necessary, the Commission may work 
proactively with filers to accomplish filer corrective disclosure.\12\
---------------------------------------------------------------------------

    \12\ Rule 103 of Regulation S-T addresses concerns that filers 
may have about liability when issues arise that are not the fault of 
the filer. See 17 CFR 232.103. Moreover, Rule 13(b) of Regulation S-
T makes clear that if a filer in good faith attempts to timely file 
but the filing is delayed due to technical difficulties beyond the 
filer's control, the filer may request an adjustment of the filing 
date of the document.
---------------------------------------------------------------------------

D. Incorrect EDGAR Identifiers

    Proposed Rule 15(a)(4) would specify that the Commission may remove 
and/or prevent public dissemination of a submission made under an 
incorrect EDGAR unique identifying number,\13\ and communicate as 
necessary with the filer and others to facilitate a filer corrective 
disclosure. From time to time, filings are incorrectly submitted and 
not associated with the correct unique identifying number, which can 
create confusion for filers, investors and other EDGAR users. When such 
errors cannot be resolved by filer corrective disclosure, the 
Commission may need to remove the erroneous submission.
---------------------------------------------------------------------------

    \13\ EDGAR provides each entity a unique identifying number, and 
submissions made by an entity are associated with that number. If an 
individual who has access to more than one unique identifying number 
(for example, a filing agent) were to make a submission for one 
entity using another entity's number, it erroneously would appear to 
EDGAR users that the submission is a filing by the unique 
identifying number holder. See 17 CFR 232.10(b).

---------------------------------------------------------------------------

[[Page 58020]]

E. EDGAR Access Code Disputes

    Proposed Rule 15(a)(5) would specify that the Commission may 
prevent a filer's ability to make submissions if the Commission 
determines that a dispute exists as to which persons have the authority 
to make submissions on behalf of the filer, until the dispute is 
resolved by the disputing parties or by a court of competent 
jurisdiction. These disputes may arise, for example, when two or more 
parties each claim control of a filing entity and each demand access to 
the entity's EDGAR account. Resolution of such disputes often turns on 
matters of state corporation law or other factors outside the scope of 
the federal securities laws. Accordingly, in these situations, the 
Commission staff has asked the disputing parties to either resolve the 
dispute themselves or have the matter adjudicated under the relevant 
state corporation law.\14\ The proposed rule would affirm the 
Commission's ability to take action to ensure that only persons 
authorized to make submissions on behalf of the filer may do so.
---------------------------------------------------------------------------

    \14\ When a dispute arises between parties, each of whom claims 
to be the legitimate corporate representative--which may occur after 
a leadership change at a filing entity--the Commission staff 
typically prevents future submissions until the parties can reach an 
agreement, or a party is able to provide a court order designating 
the appropriate corporate representative.
---------------------------------------------------------------------------

F. Potential Manipulation

    If the Commission has reason to believe that a submission or an 
attempted submission may be misleading or manipulative, proposed Rule 
15(a)(6) would specify that the Commission may prevent acceptance or 
dissemination of the submission while evaluating the circumstances 
surrounding the submission. For example, the filer's title or role 
described in the submission may not be for the correct entity or may be 
otherwise inaccurate. Additionally, the filer may include statements in 
the submission that do not relate to the form or provide responsive 
information. The proposed rule also specifies that the Commission may 
allow acceptance or dissemination if its concerns are satisfactorily 
addressed. In such circumstances, the filer would receive the filing 
date it would have received had the delay by the Commission not 
occurred, assuming the submission does not implicate other provisions 
of Rule 15.

G. Unauthorized Submissions

    Proposed Rule 15(a)(7) would specify that the Commission may 
prevent the use of EDGAR access codes if it has reason to believe that 
there has been an unauthorized submission or an attempt to make an 
unauthorized submission on EDGAR. Currently, when questions arise as to 
whether a particular submission or attempted submission was authorized, 
the Commission staff seeks to better understand the circumstances 
surrounding the submission and evaluate what steps, if any, to take in 
response. The proposed rule would specify that in such situations the 
Commission may prevent any further submissions by the filer or 
otherwise remove the filer's access to EDGAR. If its concerns are 
satisfactorily addressed, the Commission would lift the suspension of 
EDGAR access codes and allow the submission to proceed, assuming the 
submission does not implicate other provisions of Rule 15.

H. Additional Remedial Steps

    Because the Commission cannot anticipate every submission issue 
that may arise in the future, proposed Rule 15(a)(8) would specify that 
in certain circumstances the Commission may take further appropriate 
steps to address a matter and communicate as necessary with the filer 
regarding the submission. Specifically, under the proposed rule, the 
Commission may take such further steps if the Commission has reason to 
believe that, to promote the reliability and integrity of EDGAR 
submissions, it must address a submission issue that cannot be 
addressed solely by filer corrective disclosure or by the actions set 
forth in paragraphs (a)(1) through (7) of Rule 15.

I. Notice

    Finally, the proposed rule provides that the Commission may act 
without advance notice to filers or any other person. Typically, the 
Commission communicates and works with filers to address submission 
issues, but there are times when the Commission needs the flexibility 
to respond promptly to submission issues in order to avoid harm to 
investors and other EDGAR users who depend upon the accuracy of the 
information disseminated by EDGAR. In other circumstances, immediate 
action may be necessary to avoid potential threats to EDGAR, to prevent 
the dissemination of unauthorized or potentially false or misleading 
submissions, or to prevent the improper use of filers' EDGAR accounts.
    At the same time, we are mindful that administrative actions under 
the proposed rule should not unduly hinder or delay the EDGAR 
submission process. Accordingly, proposed Rule 15(b) would specify a 
method for the Commission to provide notice of its actions under the 
proposed rule to a filer and any person the Commission determines is 
relevant to the matter (``relevant person'') as soon as practicable 
after those actions are taken. Specifically, the proposed rule provides 
that, as soon as reasonably practicable after taking action pursuant to 
Rule 15 without providing advance notice, the Commission would provide 
written notice and a brief factual statement of the basis for the 
action to the filer and relevant persons. The Commission would send the 
notice and factual statement by electronic mail to the email address on 
record in the filer's EDGAR account, and the email address of any 
relevant persons. The Commission may also send, if necessary, the 
notice and factual statement by registered, certified, or express mail 
to the physical address on record in the filer's EDGAR account and the 
physical address of any relevant persons. We are proposing to notify 
other relevant persons of the action because code disputes, submissions 
made in another entity's account, and similar scenarios may involve 
parties other than the filer itself. Informing such parties of our 
actions would provide them an opportunity to bring relevant information 
in their possession to the Commission's attention and help facilitate 
prompt resolution of submission issues.

III. Request for Public Comment

    We request and encourage any interested person to submit comments 
on any aspect of the proposed amendments, other matters that might have 
an impact on the proposed amendments, and suggestions for additional 
changes. In particular, we request comment on the proposed method for 
the Commission to provide notice to a filer or relevant person of the 
Commission's actions under the proposed rule and whether there are 
alternative or additional steps the Commission could take to facilitate 
the prompt resolution of administrative issues related to EDGAR 
submissions. Comments are of particular assistance if accompanied by 
analysis of the issues addressed in those comments and any data that 
may support the analysis. We urge commenters to be as specific as 
possible.

IV. Economic Analysis

    We have carefully considered the economic effects of proposed Rule 
15.\15\

[[Page 58021]]

The proposed rule seeks to increase transparency for filers, investors, 
and other users of EDGAR by specifying the actions the Commission may 
take to resolve certain administrative issues. Increased transparency 
about Commission actions would create benefits for both filers and 
users, because filers and users would know the types of actions they 
can expect the Commission to take to promote the reliability and 
integrity of EDGAR submissions. However, we anticipate these benefits 
would be limited as the proposed rule largely reflects existing 
Commission practice. Similarly, we do not expect filers to incur 
additional costs since the proposed rule reflects corrective action the 
Commission, as the administrator of EDGAR, currently takes to promote 
the reliability and integrity of EDGAR submissions. Further, we 
anticipate the proposed rule would marginally improve efficiency, but 
would not have a significant effect on competition or capital 
formation. Because we generally cannot predict the need for or extent 
of corrective actions the proposed rule would address, we cannot 
quantify the anticipated economic effects of future corrective actions. 
Therefore, the analysis that follows provides primarily a qualitative 
assessment of the likely economic effects.
---------------------------------------------------------------------------

    \15\ Section 2(b) of the Securities Act of 1933 (``Securities 
Act''), Section 3(f) of the Exchange Act, and Section 2(c) of the 
Investment Company Act require us, when engaging in rulemaking that 
requires us to consider or determine whether an action is necessary 
or appropriate in (or, with respect to the Investment Company Act, 
consistent with) the public interest, to consider, in addition to 
the protection of investors, whether the action will promote 
efficiency, competition, and capital formation. In addition, Section 
23(a)(2) of the Exchange Act requires the Commission to consider the 
effects on competition of any rules the Commission adopts under the 
Exchange Act and prohibits the Commission from adopting any rule 
that would impose a burden on competition not necessary or 
appropriate in furtherance of the purposes of the Exchange Act.
---------------------------------------------------------------------------

A. Economic Baseline

    The Commission's current processes and procedures for resolving the 
enumerated administrative issues listed in the proposed rule and 
discussed above serve as the baseline against which we assess the 
proposed rule. This section discusses, as it relates to this 
rulemaking, filers' current usage of EDGAR and the Commission's 
processes for administering EDGAR.
    Because of the variety of administrative issues that may arise in 
connection with EDGAR submissions, the Commission has developed 
procedures for identifying and addressing the issues described above, 
although the Commission has not published those procedures. Where 
possible, the Commission currently communicates with relevant filers to 
facilitate filer corrective disclosure to address problematic 
submissions. While filer corrective disclosure addresses the majority 
of known EDGAR submission issues, there are circumstances in which 
working with a filer does not address problematic submissions, such as 
when the filer is uncooperative or the Commission cannot validate a 
filer's authorization to make submissions. Additionally, in limited 
cases, the Commission has responded promptly to submission issues 
without first consulting relevant filers in order to avoid harm to 
investors and other EDGAR users who depend upon the accuracy of the 
information disseminated by EDGAR. For these submissions, the 
Commission acts expediently to minimize the time the public and the 
Commission are exposed to such harm. While the Commission typically 
notifies these filers of its actions afterwards, some filers may not 
know specifically why the Commission took action or the nature of the 
issue with the submission.

B. Costs and Benefits

    The proposed rule specifies the actions the Commission may take 
with respect to specific administrative issues that impact the 
Commission's ability to promote the reliability and integrity of EDGAR 
submissions. We believe the proposed rule would provide increased 
transparency about the Commission's administrative processes, which in 
turn would benefit filers and improve the Commission's efficiency in 
administering EDGAR. We believe, however, that the proposed rule would 
have limited economic effects because the proposed rule largely 
reflects existing Commission practice.
    More transparency into how the Commission administers EDGAR may 
benefit filers in two ways. First, by specifying the types of issues 
for which the Commission would take action, the proposed rule could 
encourage filers to take additional actions to prevent these issues if 
they believe the benefits exceed the costs of preventative actions. 
Second, when the Commission must act to address a problematic 
submission prior to notifying a filer or when an issue cannot be 
addressed solely by a filer corrective disclosure, the proposed rule's 
formal notification requirement would ensure that filers receive timely 
notification of Commission action. To the extent that this requirement 
results in the Commission notifying filers of issues that they can 
correct, such as incorrect EDGAR identifiers, EDGAR access code 
disputes, or potentially misleading filings, filers may be able to 
benefit from rectifying issues sooner than they would have prior to the 
rule.\16\
---------------------------------------------------------------------------

    \16\ In addition to filers, the Commission may work with EDGAR 
filing agents, counsel, and other entities to correct administrative 
issues. As with filers, these entities may incur lower costs if they 
can rectify issues with EDGAR submissions sooner.
---------------------------------------------------------------------------

    Because the proposed rule would inform filers of possible action 
the Commission may take to promote the reliability and integrity of 
EDGAR submissions, the proposed rule would improve the efficiency of 
administering EDGAR. This benefit is likely to be limited because the 
proposed rule primarily codifies existing procedures and the Commission 
would continue to resolve most issues by contacting filers to 
facilitate filer corrective disclosure. Since filers may submit fewer 
filings with errors and the Commission and filers would be able to more 
quickly correct errors, the proposed rule could lead to more timely and 
accurate information in EDGAR, benefiting investors, research analysts, 
data aggregators, and other financial professionals.\17\ Moreover, 
since the

[[Page 58022]]

Commission, as the administrator of EDGAR, already takes corrective 
actions to promote the reliability and integrity of EDGAR submissions, 
we do not expect filers to incur additional costs in connection with 
these improvements. The Commission generally cannot predict the need 
for or the extent of corrective actions, so we cannot quantify the 
informational efficiency benefits from future corrective actions.
---------------------------------------------------------------------------

    \17\ See generally Michael S. Drake, Darren T. Roulstone, and 
Jacob R. Thornock, The Determinants and Consequences of Information 
Acquisition via EDGAR, 32 Contemporary Accounting Research 3 (2016) 
(Most EDGAR users access the database a few times per quarter around 
corporate events such as restatements, earnings announcements, and 
acquisition announcements. This activity is related to, but distinct 
from, financial press articles. A small subset of users access EDGAR 
daily for multiple filings.); Jonathan L. Rogers, Douglas J. 
Skinner, and Sarah L.C. Zechman, Run EDGAR Run: SEC Dissemination in 
a High-Frequency World, Chicago Booth Research Paper No. 14-36 (Feb. 
17, 2017) (finding that for a sample of Form 4 filings, there was an 
economically significant advantage to accessing data because of 
then-existing lags between the Commission's EDGAR website and the 
public dissemination feed); Brian Gibbons, Peter Iliev, and Jonathan 
Kalodimos, Analyst Information Acquisition via EDGAR, Working Paper 
(Nov. 15, 2019) (finding that information acquisition from EDGAR is 
associated with smaller analyst forecast errors); Peter Iliev, 
Jonathan Kalodimos, and Michelle Lowry, Investors' Attention to 
Corporate Governance, 9th Miami Behavioral Finance Conference 2018 
(Jul. 16, 2020) (using EDGAR log files, finding that investors 
conduct significant research into corporate governance, particularly 
for large firms, firms with low managerial entrenchment, and those 
with meetings outside of the proxy season); Huaizhi Chen, Lauren 
Cohen, Umit Gurun, Dong Lou, and Christopher J. Malloy, IQ from IP: 
Simplifying Search in Portfolio Choice, NBER Working Paper No. 24801 
(Apr. 20, 2019) (using EDGAR log data, shows institutional investors 
tracked management teams and insider-trading filings of firms); and 
Zhongling Qin, Measuring Attention: The Case of Amendments to 10K 
Annual Reports, Working Paper (Nov. 15, 2019) (showing consistently 
higher trading volume once there are enough attentive readers of 10-
K/A filings, as defined by whether the readers read the original 10-
K filings, though consistent with gradual diffusion of information). 
But see Stefano DellaVigna and Joshua M. Pollet, Investor 
Inattention and Friday Earnings Announcements, 64 J. of Fin. 2 (Mar. 
13, 2009) (finding less immediate response for Friday announcements 
than for announcements on other days, consistent with investor 
inattention); and Tim Loughran and Bill McDonald, The Use of EDGAR 
Filings by Investors, J. of Behavioral Fin. Forthcoming (Dec. 4, 
2016) (showing that the average publicly-traded firm has its annual 
report accessed only 28.4 times on the day of and day after the 
filing, though other filings such as initial public offering filings 
are more quickly consumed).
---------------------------------------------------------------------------

    To the extent that the proposed rule reduces the number of 
cybersecurity threats or reduces the administrative frictions in 
preventing cybersecurity threats, there may be benefits to the users of 
EDGAR.\18\ In particular, users, including investors, analysts, asset 
managers, and data collection companies, may incur fewer costs 
associated with cleaning or repairing systems and recovering data.\19\ 
Furthermore, individuals, investors, companies, and asset managers, 
among others, may benefit from the Commission and filers preventing 
cybersecurity attacks that disrupt the dissemination of filings through 
EDGAR or obtain confidential or protected financial information on the 
Commission's or users' systems.
---------------------------------------------------------------------------

    \18\ Under current practice, the Commission immediately prevents 
submissions to EDGAR of any submission that poses cybersecurity 
risks once the Commission identifies them. Furthermore, the 
Commission has already promulgated a rule addressing the removal of 
submissions or parts of submissions that contain executable code. 17 
CFR 232.106.
    \19\ See The Council of Econ. Advisers, The Cost of Malicious 
Cyber Activity to the U.S. Economy (Feb. 2018). Available at: 
https://www.whitehouse.gov/wp-content/uploads/2018/03/The-Cost-of-Malicious-Cyber-Activity-to-the-U.S.-Economy.pdf (estimating that in 
2016, malicious cyber activity cost the U.S. economy between $57 and 
$106 billion through denial of service attacks, disruption of 
business activity, or destruction or theft of proprietary and 
strategic information).
---------------------------------------------------------------------------

    Lastly, because EDGAR submissions generally do not require 
sensitive PII,\20\ and current Commission practices seek to identify 
and redact sensitive PII, we do not anticipate that the proposed rule 
specifying that the Commission may redact, remove and/or not 
disseminate EDGAR submissions containing PII will have a substantial 
economic effect.
---------------------------------------------------------------------------

    \20\ In 2018, the Commission amended forms and schedules to 
eliminate requirements to provide certain personally identifiable 
information. See PII Form Amendments Release, supra note 9. Also, in 
the EDGAR Filer Manual, the Commission advises against including 
social security numbers in filings submitted to the Commission. See 
https://www.sec.gov/info/edgar/edgarfm-vol2-v47.pdf. Some forms may 
require Sensitive PII in certain circumstances. For example, Form 
20-F requires dates of birth of a company's directors and senior 
management if required to be reported in the home country or 
otherwise publicly disclosed by the company. Additionally, Forms MA 
and Funding Portal require IRS Tax numbers if CRD numbers are 
unavailable. IRS Tax numbers also are required on Form SBSE if CRD 
numbers, IARD numbers, and foreign business numbers are unavailable.
---------------------------------------------------------------------------

    We request comment on all aspects of our economic analysis, 
including the potential costs and benefits of proposed Rule 15. 
Commenters are requested to provide empirical data, estimation 
methodologies, and other factual support for their views.

V. Administrative Law Matters

    The Commission finds, in accordance with Section 553(b)(3)(A) of 
the Administrative Procedure Act (``APA''), that the proposed 
amendments relate solely to agency organization, procedure, or 
practice. They are therefore not subject to the provisions of the APA 
requiring notice, opportunity for public comment, and publication. The 
Regulatory Flexibility Act of 1980 \21\ therefore does not apply. 
Nevertheless, we have determined that it would be useful to publish the 
proposed amendments for notice and comment before adoption. Because 
these amendments relate to ``agency organization, procedure or practice 
that does not substantially affect the rights or obligations of non-
agency parties,'' they are not subject to Small Business Regulatory 
Enforcement Fairness Act of 1996.\22\ These rules do not contain any 
collection of information requirements as defined by the Paperwork 
Reduction Act of 1995.\23\
---------------------------------------------------------------------------

    \21\ 5 U.S.C. 601 et seq.
    \22\ 5 U.S.C. 801 et seq.
    \23\ 44 U.S.C. 3501 et seq.
---------------------------------------------------------------------------

VI. Statutory Basis and Text of Proposed Rule Amendments

    We are proposing the new rules contained in this document under the 
authority in Sections 6, 7, 8, 10, and 19(a) of the Securities Act,\24\ 
Sections 3, 4A, 4B, 12, 13, 14, 15, 15B, 23, and 35A of the Exchange 
Act,\25\ Section 319 of the Trust Indenture Act of 1939,\26\ and 
Sections 8, 30, 31, and 38 of the Investment Company Act.\27\
---------------------------------------------------------------------------

    \24\ 15 U.S.C. 77f, 77g, 77h, 77j, and 77s (a).
    \25\ 15 U.S.C. 78c, 78d-1, 78d-2, 78l, 78m, 78n, 78o, 78o-4, 
78w, and 78ll.
    \26\ 15 U.S.C. 77sss.
    \27\ 15 U.S.C. 80a-8, 80a-29, 80a-30, and 80a-37.
---------------------------------------------------------------------------

List of Subjects in 17 CFR Part 232

    Incorporation by reference, Reporting and recordkeeping 
requirements, Securities.

    For the reasons discussed above, we propose to amend 17 CFR part 
232 as follows:

PART 232 REGULATION S-T--GENERAL RULES AND REGULATIONS FOR 
ELECTRONIC FILINGS

0
1. The authority citation for Part 232 continues to read, in part, as 
follows:

    Authority: 15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s(a), 77z-3, 
77sss(a), 78c(b), 78l, 78m, 78n, 78o(d), 78w(a), 78ll, 80a-6(c), 
80a-8, 80a-29, 80a-30, 80a-37, 7201 et seq.; and 18 U.S.C. 1350, 
unless otherwise noted.
* * * * *
0
2. Add Sec.  232.15 to read as follows:


Sec.  232.15  Administration of EDGAR.

    (a) In its administration of EDGAR, the Commission may take the 
following actions to promote the reliability and integrity of 
submissions made through EDGAR.
    (1) If the Commission determines that a submission contains 
personally identifiable information that if released may result in 
financial or personal harm to an individual, which may comprise a 
single item of information or a combination of two or more items, the 
Commission may redact such information from the submission, prevent 
dissemination of the submission, and/or remove the submission from the 
Commission's public website, and may communicate as necessary with the 
filer to facilitate submission of a version in which such information 
is redacted;
    (2) The Commission may prevent the submission to EDGAR of any 
submission that poses a cybersecurity threat, including but not limited 
to, submissions containing any malware or virus, and may communicate as 
necessary with the filer regarding the submission;
    (3) If the Commission determines that a submission has not been 
processed by EDGAR, or has been processed incorrectly by EDGAR, or 
contains an error attributable to the Commission staff, the Commission 
may correct and/or prevent public dissemination of the submission and 
may communicate with the filer as necessary to facilitate the filer's 
submission of an amendment to, or a notice of withdrawal of, the 
filer's submission (a ``filer corrective disclosure'');
    (4) If the Commission determines that a submission is made under an 
incorrect EDGAR unique identifying number, the Commission may remove 
and/or prevent public dissemination of the submission and may 
communicate with the filer as necessary to facilitate a filer 
corrective disclosure;

[[Page 58023]]

    (5) If the Commission determines that a dispute exists regarding 
the authority to make submissions on behalf of a filer, the Commission 
may prevent a filer's ability to make submissions until the dispute is 
resolved by the disputing parties or by a court of competent 
jurisdiction;
    (6) If the Commission has reason to believe that an attempted 
submission may be misleading or manipulative, the Commission may 
prevent acceptance or dissemination of the submission while evaluating 
the circumstances surrounding the submission. The Commission may allow 
acceptance or dissemination if its concerns are satisfactorily 
addressed;
    (7) If the Commission has reason to believe that a filer has made 
an unauthorized submission or attempted to make an unauthorized 
submission, the Commission may prevent any further submissions by the 
filer or otherwise remove the filer's access to EDGAR; and
    (8) If the Commission otherwise has reason to believe that, to 
promote the reliability and integrity of submissions made through 
EDGAR, it must address a submission issue that cannot be addressed 
solely by filer corrective disclosure or by the actions set forth in 
paragraphs (a)(1) through (7) above, the Commission may take such 
further steps as are appropriate to address the matter and communicate 
as necessary with the filer regarding the submission.
    (b) The Commission may act under paragraph (a) without providing 
advance notice to the filer or any other person. As soon as reasonably 
practicable after taking action under paragraph (a), the Commission 
will provide written notice and a brief factual statement of the basis 
for the action to the filer and any other person the Commission 
determines is relevant to the matter (``relevant persons''). The 
Commission will send the notice and factual statement by electronic 
mail to the email address on record in the filer's EDGAR account, and 
to the email address of any relevant persons. The Commission may also 
send, if necessary, the notice and factual statement by registered, 
certified, or express mail to the physical address on record in the 
filer's EDGAR account and the physical address of any relevant persons.
    (c) Nothing in this rule prevents a filer from addressing an error 
or mistake in the filer's submission by making a filer corrective 
disclosure.

    By the Commission.

    Dated: August 21, 2020.
Vanessa A. Countryman,
Secretary.
[FR Doc. 2020-18825 Filed 9-16-20; 8:45 am]
BILLING CODE P


