On September 5, 2002, the Securities and Exchange Commission adopted final rules accelerating the filing deadlines for annual reports on Form 10-K and quarterly reports on Form 10-Q. See SEC Release No. 33-8128 (September 5, 2002), which you can access at http://www.sec.gov/rules/final/33-8128.htm. The new deadlines, which apply to companies that meet the definition of an "accelerated filer" under the rules, will be phased-in over a three-year period. At the end of this period, an accelerated filer must file a Form 10-K within 60 days after the end of each fiscal year and a Form 10-Q within 35 days after the end of each of its first three fiscal quarters.
The SEC also adopted final rules that require accelerated filers to disclose information regarding electronic access to their filings under the Securities Exchange Act of 1934. The disclosures must be made in all annual reports on Form 10-K for fiscal years ending after December 14, 2002.
Accelerated Filing Deadlines for Periodic Reports
Accelerated Filers
An accelerated filer is any company that, as of the end of its fiscal year: has a public float of at least $75 million as of the last business day of the company's most recently completed second fiscal quarter; has been subject to the reporting requirements of the Exchange Act for at least 12 months; has filed at least one annual report on Form 10-K; and is not eligible to use the SEC's special forms for small business issuers.
A company that does not meet the definition of an accelerated filer as of the end of its first fiscal year after December 14, 2002, will have to reevaluate its status at the end of each subsequent fiscal year (although the public float test will continue to be applied based on the second quarter look-back). This will allow a company that subsequently may become an accelerated filer at least six months before the end of its fiscal year to prepare for accelerated filing deadlines.
Once a company becomes an accelerated filer, it will remain an accelerated filer until such time as it becomes eligible to use the SEC's special forms for small business issuers. These forms are available only to certain reporting companies that had revenues of less than $25 million and a public float of less than $25 million as of the end of two consecutive fiscal years.
The New Filing Deadlines
Under the new rules, the filing deadline for annual reports on Form 10-K will be accelerated from 90 to 60 calendar days after each fiscal year-end and the filing deadline for quarterly reports on Form 10-Q will be accelerated from 45 to 35 calendar days after each fiscal quarter-end. The accelerated filing deadlines will be phased-in over a three year period as follows:
Periods Covered by Reports | Form 10-K Deadline | Form 10-Q Deadline |
TheFiscal year ending after 12/14/02 but before 12/15/03, and subsequent three fiscal quarters | 90 days after year end | 45 days after quarter end |
Fiscal year ending after 12/14/03 but before 12/15/04, and subsequent three fiscal quarters | 75 days after year end | 40 days after quarter end |
Fiscal years ending after 12/14/04 and all subsequent fiscal quarters | 60 days after year end | 35 days after quarter end |
The SEC did not accelerate the filing deadline for Form 20-F. Therefore, foreign private issuers that elect to use Form 20-F will continue to file in accordance with existing deadlines. However, the SEC stated that it is continuing to consider whether acceleration would be appropriate. The SEC also did not accelerate the filing deadline for proxy or information statements from which certain information will be incorporated by reference in to an accelerated filer's Form 10-K. Therefore, the filing deadline for such proxy and information statements will continue to be 120 days after the end of the accelerated filer's fiscal year.
Conforming Amendments to Regulation S-X. The SEC also made conforming changes to certain provisions of Regulation S-X that govern the timeliness of financial statements that are included in Securities Act and other Exchange Act filings, such as registration statements, proxy statements and information statements.
Coordination with Sarbanes-Oxley Measures. Although the accelerated filing deadlines do not have any immediate impact, it is important for companies that are accelerated filers to factor the deadlines into their evaluation of and modifications to their "internal controls" and "disclosure controls and procedures" as required in connection with the certification requirements of the Sarbanes-Oxley Act of 2002. In addition, although the deadline for filing proxy and information statements was not accelerated, companies will want to develop that disclosure earlier rather than later, since these certification requirements apply to the portions of these documents that are incorporated by reference into annual reports on Form 10-K. For a discussion of these requirements and related implementation issues, see our memorandum entitled "Sarbanes-Oxley Update: SEC Adopts Section 302 Certification Rules."
Website Disclosure
Under the new rules, each accelerated filer must disclose in its annual reports on Form 10-K its website address (if it has one) and whether it makes its Exchange Act filings available on the website as soon as reasonably practicable after filing. If an accelerated filer does not make its reports available in this manner, the accelerated filer must also disclose the reasons it does not do so and whether it voluntarily will provide electronic or paper copies of its filings free of charge upon request. This new disclosure obligation for accelerated filers applies to annual reports on Form 10-K for fiscal years ending after December 14, 2002.
According to the SEC, an accelerated filer can affirmatively answer the disclosure item regarding website access if it provides a hyperlink on its website to a third party site that makes SEC filings available. In addition, because the SEC now provides real-time access to Exchange Act reports, a hyperlink to its EDGAR website would also be sufficient. In each case, however, the hyperlink should be directly to the company's filings or to a list of its filings, rather than to the home page or general search page of the hyperlinked site.
The new rules do not specify how long an accelerated filer's reports must be made available on or through its website. However, the SEC encourages companies to provide "ongoing website access to their reports," and suggests that companies provide website access to previous reports for at least a 12-month period.
For more information about the accelerated filing deadlines or the website disclosure obligations, please contact the Dorsey & Whitney attorney with whom you work.
September 10, 2002