registrant, or the issuance or authorization for issuance of
securities of the registrant in exchange for outstanding securities.
Section (b) of Item 12 requires disclosure of any material
differences between the outstanding securities and the modified or
new securities in respect of any of the matters concerning which
information would be required in the description of the securities
in Item 202 of Regulation S-K. Item 19 of Schedule 14A requires
disclosure of amendments to the registrant's charter, bylaws, or
other documents.
    \178\ Over the course of a given fiscal year, it is possible
that a registrant may make various non-material changes to the
rights and privileges of its securities that do not require separate
disclosure on Form 8-K. However, if any changes are made, whether
material or non-material, the proposed amendments would require a
registrant to update the description of securities in the exhibit
filed with its Form 10-K.
    \179\ See Item 601(b)(3) of Regulation S-K [17 CFR
229.601(b)(3)]. The proposal would amend Item 601(b)(4) instead of
Item 601(b)(3) because (b)(4) is consistent with Item 202's
requirement to provide a description of capital stock that is
registered while (b)(3) is specific to the articles of incorporation
and bylaws.
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    We recognize that some commenters opposed requiring Item 202
disclosure in periodic reports, stating that this information can
easily be found in registration statements,\180\ while other commenters
noted that the information overlaps with disclosure required under U.S.
GAAP.\181\ Requiring Item 202 disclosure as an exhibit to annual
reports could improve the ability of investors to gain access to
information about their rights as security holders. The proposed Item
601(b)(4)(vi) would allow investors to easily locate an updated
description of their rights as security holders in the most recent
annual report rather than require investors to search through prior
filings to find this disclosure. Where a registrant has previously
filed the Item 202 information as an exhibit, and so long as there has
not been any change to the information called for by Item 202, the
registrant may incorporate the information by reference and provide a
hyperlink to the previously filed exhibit. Therefore, we believe that
any additional compliance cost associated with the proposed amendment
should not be unduly burdensome.
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    \180\ See, e.g., Letters from Fenwick; CGCIV; Chamber 2; and
FedEx. See also Davis Polk 1.
    \181\ See Letters from CAQ and KPMG LLP (July 21, 2016)
(``KPMG''). Both commenters referenced Item 202 in the context of
broader recommendations to the Commission to work with the FASB and
the PCAOB to eliminate redundancies.
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Request for Comment
    41. Should the proposed amendments include a requirement to file
Item 202 disclosure for each class of securities registered under
Section 12 of the Exchange Act as an exhibit to the annual report? Why
or why not? Should registrants also be required to include descriptions
of securities that are not registered under Section 12 of the Exchange
Act? For example, should issuers reporting only under Section 15(d) of
the Exchange Act (e.g., asset-backed issuers) be required to file Item
202 disclosure as a Form 10-K exhibit?
    42. Do the requirements for Item 202, and our proposal to require
that the Item 202 information be provided as an exhibit to the annual
report, provide sufficient disclosure about debt securities or other
classes of stock with different or preferential voting rights?
    43. Would the new requirements result in significantly higher
compliance costs? Would the new requirements provide benefits to
investors and facilitate informed investment decisions? Would the
proposed amendments require disclosure that is adequately provided
elsewhere in the annual report or on EDGAR? \182\
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    \182\ See supra notes 172 and 181 and accompanying text.
---------------------------------------------------------------------------

    44. Would compliance with the proposed amendment be problematic for
issuers with multiples classes of registered securities (e.g., well-
known seasoned issuers or asset-backed issuers)? If so, how should we
revise the proposed amendments to avoid unnecessary burdens that may be
imposed on these issuers?
2. Information Omitted From Exhibits (Item 601)
    Item 601 of Regulation S-K generally requires registrants to file
complete copies of exhibits.\183\ Securities Act Rule 406 \184\ and
Exchange Act Rule 24b-2 \185\ permit registrants to request
confidential treatment of information included in an exhibit to a
filing or any other document required to be filed under either the
Securities Act or the Exchange Act. Item 601(b)(2) states that
registrants shall not file schedules or similar attachments to material
plans of acquisition, reorganization, arrangement, liquidation, or
succession unless they contain information material to an investment
decision and unless that information is not otherwise disclosed in the
agreement or the disclosure document.\186\ The Commission staff
generally has not objected where a registrant omits personally
identifiable information from exhibits without submitting a
confidential treatment request.
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    \183\ Item 601 of Regulation S-K [17 CFR 229.601].
    \184\ 17 CFR 230.406.
    \185\ 17 CFR 240.24b-2.
    \186\ 17 CFR 229.601(b)(2).
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    To modernize and simplify the disclosure requirements under Item
601, we are proposing to add new paragraphs (a)(5) and (a)(6) to expand
the existing accommodation in Item 601(b)(2) to include all exhibits
filed under Item 601 and permit the omission of personally identifiable
information. We also propose to add paragraph (b)(10)(iv) to Item 601
to reduce significantly the need for registrants to submit applications
for confidential treatment of information in material contract exhibits
required by that item.\187\ The proposals to add paragraphs (a)(6) and
(b)(10)(iv) are broader than the staff's recommendations in the FAST
Act Report. As explained more fully below, we believe that they are
consistent with our mandate under the FAST Act to modernize and
simplify our disclosure requirements while still providing all material
information.\188\
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    \187\ Certain domestic forms include their exhibits requirements
in the form and/or do not separately reference Item 601 of
Regulation S-K (e.g., Schedule 13E-3 and Schedule 13D). As such, we
are considering whether the rationale for the proposed amendments to
Item 601 of Regulation S-K is also applicable to the exhibit
requirements in these forms. For example, Schedule 13E-3 and
Schedule 13D require registrants to file as exhibits certain
material agreements that may be deemed analogous to the exhibits
required under Item 601 of Regulation S-K. We are requesting further
comment to assist in our evaluation of this issue.
    \188\ See FAST Act Report, supra note 2, at Recommendation F.2
(recommending only that the Commission permit registrants to omit
attachments and schedules filed with exhibits unless they contain
information that is material to an investment decision that has not
been otherwise disclosed).
---------------------------------------------------------------------------

a. Schedules and Attachments to Exhibits
    Proposed Item 601(a)(5) would permit registrants to omit entire
schedules and similar attachments to exhibits unless they contain
material information and unless that information is not otherwise
disclosed in the exhibit or the disclosure document. This exception,
which is similar to the existing accommodation in Item 601(b)(2) for
plans of acquisition, reorganization, arrangement, liquidation, or
succession, would be expanded to all exhibits under the proposed
amendments. Similar to the current provisions in Item 601(b)(2),
proposed Item 601(a)(5) would require registrants to provide with each
exhibit a list briefly identifying the contents of any omitted
schedules and attachments.

In addition, registrants would be required to provide, on a
supplemental basis, a copy of any omitted schedules or attachments to
the Commission staff upon request.\189\
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    \189\ See proposed Item 601(a)(5) of Regulation S-K. Securities
Act Rule 418 [17 CFR 230.418] states that the Commission or its
staff may, where it is deemed appropriate, request supplemental
information concerning the registrant or a registration statement,
among other things. Exchange Act Rule 12b-4 [17 CFR 240.12b-4]
similarly indicates that the Commission or its staff may, where it
is deemed appropriate, request supplemental information concerning
the registrant, a registration statement, and a periodic or other
report filed under the Exchange Act. Unlike the current version of
Item 601(b)(2), registrants would not be required to include with
its list identifying the contents of all omitted schedules an
agreement to furnish a supplemental copy of any omitted schedule to
the Commission upon request. Instead, proposed Item 601(a)(5) would
require registrants to provide a copy of any omitted schedule to the
Commission staff upon request.
---------------------------------------------------------------------------

    The Commission requested comment in the Concept Release on whether
to allow registrants to omit schedules and attachments to all exhibits,
provided that the omitted schedules and attachments do not include
material information that is not otherwise included in the exhibit or
the disclosure document. Commenters uniformly supported expanding the
exception under Item 601(b)(2).\190\ Some noted that the current
requirement to file complete exhibits is unnecessarily cumbersome and
expensive where the schedules do not contain material information.\191\
Commenters also stated that these burdens are exacerbated where those
schedules contain, as is frequently the case, confidential information
that would require registrants to file confidential treatment
requests.\192\ A few commenters that supported allowing registrants to
omit schedules opposed requiring registrants to provide a list of their
omitted schedules.\193\ Another commenter supported a requirement to
include a list, but stated that requiring registrants to provide a
materiality analysis supporting the decision to omit the schedules was
unnecessary.\194\ We believe that a list of omitted schedules, similar
to current Item 601(b)(2), would be informative for investors.
---------------------------------------------------------------------------

    \190\ See, e.g., Letters from Committee on Securities Law of the
Business Law Section of the Maryland State Bar Association
(``Maryland Bar Securities Committee'') (July 21, 2016); ABA;
NYSSCPA; FedEx; Fenwick; and Davis Polk 1. See also Letter from
CGCIV (supporting exemption from filing immaterial attachments to
material agreements for smaller reporting companies).
    \191\ See, e.g., Letters from Fenwick and Davis Polk 1.
    \192\ See, e.g., Letters from Fenwick; Fenwick and West LLP,
Cooley LLP and Wilson Sonsini Goodrich & Rosati, PC (June 19, 2012)
[S-K Study Letter] (``Silicon Valley''); and Mike Liles (Apr. 10,
2013) [S-K Study Letter] (endorsing the comments expressed in the
Silicon Valley Letter).
    \193\ See Letter from Fenwick (stating that it does not believe
``the burden of completing such a list of omitted schedules is
offset by any meaningful advantage to investors''); see also letters
from NYSSCPA and FEI.
    \194\ See Letter from Maryland Bar Securities Committee.
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Request for Comment
    45. Should the proposed amendments permit registrants to omit
entire schedules and attachments to exhibits unless the schedules or
attachments contain material information and unless that information is
not otherwise disclosed in the exhibit or the disclosure document?
Similarly, should we amend our investment company rules or forms to
permit investment companies to omit entire schedules and attachments?
    46. Should Item 601(a)(5) require registrants to provide a list of
the contents of the omitted schedules and attachments as proposed?
Would a list of the titles of the schedules and attachments be
sufficient to identify the contents of the omitted schedules and
attachments? Should we provide guidance on the registrant's description
of any omitted schedule or attachment?
    47. As proposed, Item 601(a)(5) would expand the existing Item
601(b)(2) accommodation to all exhibits. Should we require exhibits
filed pursuant to certain subsections of Item 601(b) to include all
schedules and attachments even if they are not material? If so, which
exhibits and subsections?
b. Personally Identifiable Information
    The Commission generally does not publish or make available
information that ``would constitute a clearly unwarranted invasion of
personal privacy.'' \195\ This information includes personally
identifiable information (``PII''). Exhibits filed pursuant to Item 601
may include PII such as bank account numbers, social security numbers,
home addresses and similar information. The staff generally does not
object where a registrant omits PII from exhibits without submitting a
confidential treatment request.
---------------------------------------------------------------------------

    \195\ 17 CFR 200.80(b)(6) (exempting personnel and medical files
and similar files the disclosure of which would constitute a clearly
unwarranted invasion of personal privacy).
---------------------------------------------------------------------------

    In the Concept Release, the Commission requested comment about
whether to continue or modify the current accommodation on PII.
Numerous commenters recommended codifying the current staff practice of
permitting registrants to omit PII from exhibits without making a
formal confidential treatment request.\196\
---------------------------------------------------------------------------

    \196\ See, e.g., Letters from NYSSCPA; Chamber 2; FedEx; CGCIV;
Maryland Bar Securities Committee; General Motors; and Financial
Executives International.
---------------------------------------------------------------------------

    Consistent with our mandate under the FAST Act to modernize and
simplify our disclosure requirements while still providing all material
information, Item 601(a)(6), as proposed, would permit registrants to
omit PII without submitting a confidential treatment request under Rule
406 or Rule 24b-2. Allowing registrants to omit PII without submitting
a confidential treatment request is also intended to better safeguard
PII by limiting its dissemination. Under the proposed amendment,
registrants also would not be required to provide an analysis to redact
PII from exhibits.
Request for Comment
    48. Should we codify the current staff practice of permitting
registrants to omit PII without making a formal confidential treatment
request as proposed? Similarly, should we amend our investment company
rules or forms to similarly permit investment companies to omit PII?
c. Redaction of Confidential Information in Material Contract Exhibits
    The proposed revisions to Item 601(b)(10) would permit registrants
to omit confidential information from material contracts filed pursuant
to that item where such information is both (i) not material and (ii)
competitively harmful if publicly disclosed, even where the registrant
has not submitted a confidential treatment request to the Commission.
Instead, registrants would be required to mark the exhibit index to
indicate that portions of the exhibit or exhibits have been omitted and
include a prominent statement on the first page of each redacted
exhibit that information in the marked sections of the exhibit has been
omitted from the filed version of the exhibit. Registrants would also
be required to indicate with brackets where the information has been
omitted from the filed version of the exhibit.\197\
---------------------------------------------------------------------------

    \197\ These proposals are consistent with the marking
requirements for confidential treatment requests under Rule 406 and
Rule 24b-2.
---------------------------------------------------------------------------

    Although registrants would not be required to file a confidential
treatment request in accordance with Rule 406 or Rule 24b-2 in
connection with the redacted exhibit, the responsibility of a
registrant to determine whether all material information has been
disclosed and whether they may redact the

information under the proposed rules would remain unchanged.\198\ The
Commission staff would continue its selective review of registrant
filings and would selectively assess whether redactions from exhibits
appear to be limited to information that is not material and that would
subject the registrant to competitive harm if publicly disclosed. As is
currently the case, the redacted information should include no more
text than necessary to prevent competitive harm to the registrant. Upon
request, registrants would be expected to promptly provide supplemental
materials to the staff similar to those currently required in a
confidential treatment request, including an unredacted paper copy of
the exhibit and an analysis of why the redacted information is both (i)
not material and (ii) would cause competitive harm if publicly
disclosed.\199\ The timing of any staff review would not alleviate a
registrant's obligation to disclose all material information and its
obligation to limit redactions to those provisions and terms that are
both (i) not material and (ii) would cause competitive harm if publicly
disclosed. Registrants could request confidential treatment of this
supplemental information pursuant to Rule 83 while it is in the staff's
possession. If the registrant's supplemental materials do not support
its redactions, similar to the process the staff currently follows for
confidential treatment requests under Rule 406 and Rule 24b-2, the
staff may request that the registrant file an amendment that includes
some, or all, of the previously redacted information.\200\
---------------------------------------------------------------------------

    \198\ See Rule 12b-20 [17 CFR 240.12b-20], Rule 408(a) [17 CFR
230.408(a)] and proposed Item 601(b)(10)(iv).
    \199\ This analysis would be substantially the same as is
currently required in confidential treatment requests submitted in
reliance on Rule 80(b)(4) [17 CFR 200.80(b)(4)] pursuant to Rule 406
or Rule 24b-2.
    \200\ Upon completion of the staff's review, the materials would
be returned or destroyed if the registrant complies with the
procedures outlined in Rule 418 or 12b-4.
---------------------------------------------------------------------------

    The Concept Release did not request comment on the confidential
treatment process, other than its request for comment about omitting
schedules and attachments to exhibits; however, two commenters noted
that the requirement to file material agreements causes registrants to
expend significant resources in preparing confidential treatment
requests.\201\ We believe that simplifying and streamlining this
process would be consistent with the FAST Act mandate to revise
Regulation S-K in a manner that reduces the costs and burdens on
registrants while providing investors all material information. In
addition, we believe the proposal would result in limiting the
dissemination of sensitive information because registrants would not be
required to provide an un-redacted copy of each exhibit at the time of
filing in order to request confidential treatment. Instead, this
information would only be required on request in connection with a
staff filing review.
---------------------------------------------------------------------------

    \201\ See Letter from Fenwick and letter from Davis Polk 1
(requesting that the Commission reconsider the utility of the
(b)(10) exhibit filing requirement).
---------------------------------------------------------------------------

Request for Comment
    49. Should registrants be permitted to omit confidential
information from exhibits filed pursuant to Item 601(b)(10) that is
both (i) not material and (ii) competitively harmful if publicly
disclosed without submitting a confidential treatment request as
proposed? Similarly, should we amend our investment company forms to
permit investment companies to omit confidential information from
exhibits?
    50. Would the disclosure provided in exhibits change under the
proposed amendments? Why or why not?
    51. Under the proposed amendments, if the registrant's supplemental
materials do not support its redactions, the staff may request that the
registrant file an amendment that includes some, or all, of the
previously redacted information. In these situations, should we require
registrants to include an explanatory note describing why the amendment
is being provided? Should we also require that any amendment highlight
the previously redacted information?
    52. Should we allow registrants to omit confidential information
from exhibits other than those filed pursuant to Item 601(b)(10) that
is both (i) not material and (ii) competitively harmful if publicly
disclosed? For instance, should registrants be allowed to omit similar
information from exhibits filed pursuant to Item 601(b)(2)? Should they
be allowed to omit similar information from exhibits filed pursuant to
other subsections of Item 601? If so, which subsections and why?
    53. Should we apply the proposed amendments discussed in Section
II.E.2. (Information Omitted from Exhibits) to forms that include their
exhibits requirements in the form or do not separately reference Item
601 of Regulation S-K (e.g., Schedule 13E-3 and Schedule 13-D)? If so,
what forms should be amended and to what extent? If not, why? Are there
special considerations associated with change of control transactions,
going private transactions, or beneficial ownership reporting that
render the provision of information in exhibits material to an
investment or voting decision? What are the costs and benefits of
applying the proposed amendments to these forms? How do they differ
from the costs and benefits of applying the proposed amendments to
Regulation S-K? \202\
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    \202\ We are proposing to apply the proposed amendments to Form
20-F to maintain a consistent approach to the exhibit filing
requirements for domestic registrants and foreign private issuers.
See infra Section II.E.5 (Exhibits--Application to Foreign Private
Issuers).
---------------------------------------------------------------------------

3. Material Contracts (Item 601(b)(10)(i))
    Item 601(b)(10)(i) requires registrants to file every material
contract not made in the ordinary course of business, provided that one
of two tests is met: (i) The contract must be performed in whole or in
part at or after the filing of the registration statement or report, or
(ii) the contract was entered into not more than two years before that
filing.\203\
---------------------------------------------------------------------------

    \203\ Item 601(b)(10)(i) of Regulation S-K [17 CFR
229.601(b)(10)(i)].
---------------------------------------------------------------------------

    The first test captures contracts that have not been fully
performed prior to the filing date. The second test--the two-year look
back--captures material contracts that were fully performed before the
filing date.\204\ Currently, all registrants subject to Item 601 must
consider both tests when deciding whether a material, non-ordinary
course contract must be filed as an exhibit.
---------------------------------------------------------------------------

    \204\ The two-year look back is included in Schedule A of the
Securities Act [15 U.S.C. 77aa(24)] and serves as a ``cutoff
period'' so registrants would not have to file material contracts
that may have been fully performed many years prior to registration.
When Section 12(g) was added to the Exchange Act in 1964, the
Commission was authorized to issue rules requiring such material
contracts to be filed with Exchange Act reports. See Section
12(b)(1)(I) of the Exchange Act; H.R. Rep. No. 88-1418, 83rd Cong.,
2nd Sess., 1964. Prior to the enactment of Section 12(g), the
Exchange Act reporting requirements were applicable only to listed
companies.
---------------------------------------------------------------------------

    Consistent with the recommendations in the FAST Act Report,\205\ we
are proposing amendments to Item 601(b)(10)(i) that would limit the
two-year look back test to newly reporting registrants. Proposed
Instruction 1 to Item 601(b)(10)(i) defines a ``newly reporting
registrant'' as any registrant filing a registration statement that, at
the time of such filing, is not subject to the reporting requirements
of Section 13(a) or 15(d) of the Exchange Act, whether or not such
registrant has ever previously been subject to the reporting
requirements of Section 13(a) or 15(d), and any registrant that has not
filed an annual report since the revival of a previously suspended
reporting

obligation.\206\ As an example, a registrant that is filing its first
registration statement under the Securities Act or the Exchange Act, or
filing its first Form 10-K since the revival of its reporting
obligation,\207\ would be required to file material agreements under
Item 601(b)(10)(i) for the two-year look back period.\208\ The
definition of ``newly reporting registrant'' under the proposed
instruction also would include any registrant that (a) was a shell
company, other than a business combination related shell company, as
defined in Rule 12b-2 under the Exchange Act, immediately before
completing a transaction that has the effect of causing it to cease
being a shell company, and (b) has not filed a registration statement
or Form 8-K, as required by Item 2.01 and Item 5.06 of that form, since
the completion of the transaction (or, in the case of foreign private
issuers, has not filed a Form 20-F since the completion of the
transaction).\209\ Under the proposed amendments, a registrant meeting
this definition would be required to file material agreements for the
two-year look back period. The proposed amendments would help ensure
that investors receive access to agreements containing material
information, including agreements entered into by newly reporting
registrants up to two years prior to the commencement of their
reporting obligations. Registrants with established reporting histories
would not be required to comply with the two-year look back requirement
because investors would continue to have access to any material
agreements previously filed on EDGAR.\210\ As such, the proposed
amendments would streamline reporting obligations while maintaining
investor protections.
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    \205\ See FAST Act Report, supra note 2, at Recommendation F.3.
    \206\ See proposed Instruction 1 to paragraph (b)(10) of Item
601.
    \207\ See Exchange Act Rules Compliance and Disclosure
Interpretation 153.02 (stating that a Form 10-K for the previous
fiscal year is the first report due after a reporting obligation is
revived), available at https://www.sec.gov/divisions/corpfin/guidance/exchangeactrules-interps.htm (last updated December 8,
2016).
    \208\ In the case of a registrant with a suspended reporting
obligation that, less than two years later, is revived, the proposed
requirement to file material agreements for the two-year look back
period may be satisfied by incorporating by reference and
hyperlinking to agreements previously filed on EDGAR and filing any
material agreements entered into while the registrant was not
reporting. See Exhibit Hyperlinks Adopting Release, supra note 14,
at 14135.
    \209\ Under the proposed amendment, the definition of ``newly
reporting registrant'' would not include reporting companies
completing merger transactions with business combination-related
shell companies.
    \210\ Schedule A of the Securities Act requires that registrants
file ``every material contract made, not in the ordinary course of
business, which contract is to be executed in whole or in part at or
after the filing of the registration statement or which contract has
been made not more than two years before such filing.'' See Schedule
A, paragraph 24 [15 U.S.C. 77aa(24)]. Due to the availability of
filings on EDGAR, as noted above, we believe the two-year look back
requirement does not provide additional investor protection when
applied to registrants with a reporting history.
---------------------------------------------------------------------------

Request for Comment
    54. Should we revise Item 601(b)(10)(i) to limit the two-year look
back test to newly reporting registrants as proposed?
    55. Should the two-year look back requirement apply to a registrant
completing a reverse merger involving any public shell company that is
not a business combination-related shell company as proposed? Why or
why not?
    56. Should the proposed amendment be broadened to require that a
public company acquiring or merging with a non-public company must
apply the two-year look back test to agreements entered into by the
non-public company prior to the transaction date?
    57. Should registrants that have revived reporting obligations be
required as proposed, to file material contracts for the full two-year
look back period, regardless of how long their prior reporting
obligation was suspended? Alternatively, if the registrant's reporting
obligation was suspended for less than two years prior to revival,
should the registrant only be required to file agreements entered into
while the obligation was suspended?
4. Subsidiaries of the Registrant and Entity Identifiers (Item
601(b)(21)(i))
    Item 601(b)(21) requires a registrant to list as an exhibit all of
its subsidiaries, the state, or other jurisdiction of incorporation or
organization of each, and the names under which those subsidiaries do
business.\211\ The name of particular subsidiaries may be omitted if
the unnamed subsidiaries, considered in the aggregate as a single
subsidiary, would not constitute a ``significant subsidiary'' under
Rule 1-02(w) of Regulation S-X.\212\
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    \211\ Item 601(b)(21)(i) of Regulation S-K [17 CFR
229.601(b)(21)(i)].
    \212\ Item 601(b)(21)(ii) of Regulation S-K [17 CFR
229.601(b)(21)(ii)].
---------------------------------------------------------------------------

    Consistent with the staff's recommendation in the FAST Act
Report,\213\ we are proposing amendments to Item 601(b)(21)(i) that
would require registrants to include in the exhibit the legal entity
identifier (``LEI''), if one has been obtained, of the registrant and
each subsidiary listed. An LEI is a 20-character, alpha-numeric code
that allows for unique identification of entities engaged in financial
transactions. LEIs are intended to improve market transparency by
providing clear identification of participants.\214\ Fees are not
imposed on investors for use of, or access to, LEIs. All of the
associated reference data needed to understand, process, and use LEIs
is widely and freely available. These associated reference data also
are not subject to any usage restrictions. There is a cost of obtaining
an LEI for registrants: A one-time fee of $75-$119 and $50-$99 in
annual maintenance fees.\215\
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    \213\ See FAST Act Report, supra note 2, at Recommendation F.4.
    \214\ See Arthur B. Kennickell, Bd. of Governors of the Fed.
Reserve Sys., Identity, Identification and Identifiers: The Global
Legal Entity Identifier System (Nov. 8, 2016), available at https://www.federalreserve.gov/econresdata/feds/2016/files/2016103pap.pdf.
    \215\ See Glob. Legal Entity Identifier Found., Frequently Asked
Questions--Fees, Payment and Taxes, available at https://lei.bloomberg.com/docs/faq; and Glob. Mkt. Entity Identifier Util.,
GMEI Utility Pricing, available at https://www.gmeiutility.org/gmeiUtilityPricing.jsp. See also, Letter from SIFMA.
---------------------------------------------------------------------------

    In the Concept Release, we solicited comment on whether we should
require registrants to disclose their LEI and the LEIs of their
subsidiaries (if available) in Exhibit 21 and how this information
would benefit investors. Many commenters supported requiring disclosure
of LEIs,\216\ with most of them

recommending that we require both the registrant and its subsidiaries
to obtain and disclose LEIs.\217\ These commenters generally stated
that the use of LEIs would improve investors' ability to understand
registrants' risk profiles. In this regard, commenters observed that
LEIs would allow investors to link third-party data with structured
data from the Commission to produce more meaningful analysis.\218\
---------------------------------------------------------------------------

    \216\ See, e.g., Letters from Data Coalition (July 21, 2016)
(``Data Coalition'') (recommending that the Commission adopt the
``if available'' disclosure standard as an interim step prior to
requiring registrants to obtain and disclose LEIs); Bloomberg
(recommending that filers should be required to obtain an LEI);
SIFMA (noting that regulators have driven the expansion of the LEI
system and expressing support for recent regulations that impose
requirements upon certain investment companies to obtain an LEI);
and XBRL US (recommending that the Commission require registrants to
obtain an LEI for every company in their corporate structure;
stating that use of LEIs would improve the functionality of filings
by identifying participants in financial transactions and bringing
clarity to interrelationships between entities). See also Letters
from E. Bean; SEC Investor Advisory Committee (June 15, 2016) (``IAC
1'') (stating that LEIs could facilitate the work of the Commission
and other prudential regulators related to systemic risk, firm
interconnectivity, and leverage at broker-dealers, asset managers,
and other market participants and benefit investors trying to
understand complex structures); Owner Subcommittee of the SEC's
Investor Advisory Committee (Nov. 22, 2016) (``IAC 2''); Main Street
Alliance (July 5, 2016); The Financial Accountability and Corporate
Transparency Coalition (July 6, 2016); Citizens for Tax Justice; GRI
(July 21, 2016); American Sustainable Business Council, Citizens for
Tax Justice, FACT Coalition, Fair Share, Global Financial Integrity
and Main Street Alliance (July 21, 2016); Americans for Tax Fairness
(July 21, 2016); AFL-CIO (July 21, 2016); Oxfam America (July 21,
2016); S. Percoco; Americans for Financial Reform (Aug. 10, 2016);
NYSCRF; Global Legal Identity Identifier Foundation (July 21, 2016);
and CFA Institute. See also letter from TagniFi, LLC (Jan. 27, 2016)
[Disclosure Effectiveness letter] (``TagniFi'').
    \217\ See id. Two commenters opposed an LEI requirement, stating
that ``there is no global standard for LEI.'' See Letters from
Financial Executives International and General Motors.
    \218\ See, e.g., Letters from SIFMA, Bloomberg, and Data
Coalition. See also Nationally Recognized Statistical Rating
Organizations, Release No. 34-72936 (Aug. 27, 2014) [79 FR 55077
(Sept. 15, 2014)] (the ``2014 NRSRO Amendments Release'') and Credit
Risk Retention, Release No. 34-73407 (Oct. 22, 2014) [79 FR 77601
(Dec. 24, 2014)] (the ``Credit Risk Retention Release'').
---------------------------------------------------------------------------

    The proposed amendment is intended to modernize the disclosure
requirements under Regulation S-K by requiring registrants to provide
any LEIs obtained for themselves or their listed subsidiaries to
investors. This proposal would allow investors to use the LEI to more
quickly and precisely identify registrants and their subsidiaries. Our
proposal is consistent with prior regulatory efforts. For example, as
part of our recent investment company reporting modernization efforts,
we adopted rules requiring certain registrants and funds to obtain LEIs
to provide a consistent means of identification.\219\ Due in part to
these and other similar global regulatory efforts, the usage of LEIs
has increased over the last few years.\220\
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    \219\ See Investment Company Reporting Modernization, Release
No. 33-10231 (Nov. 18, 2016) [81 FR 81870]) (the ``IM Modernization
Adopting Release''). See also id. at n. 61 (discussing additional
contexts in which the Commission has required LEIs, including Form
PF--Reporting Form for Investment Advisers to Private Funds and
Certain Commodity Pool Operators and Commodity Trading Advisors,
available at http://www.sec.gov/rules/final/2011/ia-3308-formpf.pdf); Regulation SBSR-Reporting and Dissemination of
Security-Based Swap Information, Release No. 34-74244 (Feb. 11,
2015) [80 FR 14564 (Mar. 19, 2015)]. See also 2014 NRSRO Amendments
Release, supra note 218; Credit Risk Retention Release, supra note
218.
    \220\ See, e.g., Legal Entity Identifier Regulatory Oversight
Comm., The Global LEI System and regulatory uses of the LEI (Nov. 5,
2015), available at http://www.leiroc.org/publications/gls/lou_20151105-1.pdf (progress report by the Legal Identifier
Regulatory Oversight Committee, including an annex listing
regulatory actions in the United States, the EU countries, and eight
other countries which require, request, or allow the use of LEIs).
The global LEI system currently has over 580,000 registrations and
is growing. See Global LEI Foundation daily updated ``concatenated
file,'' which includes all LEIs issued globally and related LEI
reference data, available at https://www.gleif.org/en/lei-data/gleif-concatenated-file/lei-download#or http://openleis.com. See
also Glob. Legal Entity Identifier Found., Regulatory Use of the LEI
(providing an overview of current and proposed global regulatory
activities involving LEI), available at https://www.gleif.org/en/about-lei/regulatory-use-of-the-lei; Global LEI Data Quality Reports
Archive, available at https://www.gleif.org/en/lei-data/gleif-data-quality-management/about-the-data-quality-reports/archive# (showing
total number of LEIs issued, renewed, reactivated and lapsed from
January 2016 through April 2017).
---------------------------------------------------------------------------

    We recognize that many registrants and their subsidiaries may not
have LEIs. Accordingly, our proposals would require disclosure of LEIs
only for those registrants and subsidiaries that choose to obtain this
identifier. Below, we solicit comment as to whether to require
registrants and their subsidiaries to obtain LEIs.
Request for Comment
    58. Should we require registrants to include in Exhibit 21 the LEI
(if one has been obtained) of the registrant and each subsidiary
required to be listed in the exhibit? Would requiring registrants to
disclose LEIs in Exhibit 21 as proposed, provide investors with
sufficient access to that information? Is there another location in
registrant filings, other than Exhibit 21, where LEI information would
be more accessible to investors? For example, should a registrant be
required to disclose its LEI, if it has one, on the cover page of each
registration statement, periodic filing, or current report and provide
the LEIs for its significant subsidiaries in an exhibit?
    59. If we require registrants to include LEIs in Exhibit 21 as
proposed, should we also require them to provide that information as
machine-readable data? If so, what structured data format would be the
most useful to investors? For example, the Commission recently adopted
amendments requiring investment companies to provide LEIs in XML
format.\221\ Should we require registrants that have already obtained
LEIs to disclose their LEIs in XML format? Or, for consistency with the
proposal to tag information on the cover page of certain forms using
Inline XBRL format,\222\ should we require disclosure of LEIs in Inline
XBRL format? What would be the additional cost to registrants to
provide LEIs in XML, Inline XBRL, or another machine-readable format?
---------------------------------------------------------------------------

    \221\ See IM Modernization Adopting Release, supra note 219.
    \222\ See infra Section II.G.1 (Tagging Cover Page Data).
---------------------------------------------------------------------------

    60. In light of the many comments received on the costs and
benefits of LEIs,\223\ should our rules encourage or require
registrants and each subsidiary thereof required to be listed in
Exhibit 21 to obtain an LEI? If so, how should we structure our rules
to achieve this purpose?
---------------------------------------------------------------------------

    \223\ See supra notes 216 to 218 and accompanying text.
---------------------------------------------------------------------------

    61. Some registrants have numerous subsidiaries or affiliates
operating globally, while other registrants have simple corporate
structures. Should we require certain types of registrants, such as
larger registrants or subsidiaries, to obtain LEIs? For example, should
we limit the requirement to large accelerated filers, well-known
seasoned issuers, or foreign private issuers?
5. Application to Foreign Private Issuers
    The Commission previously adopted amendments to conform the exhibit
requirements in Form 20-F to the requirements in Item 601.\224\ To
maintain a consistent approach to the exhibit requirements for domestic
registrants and foreign private issuers, the proposed amendments would
require foreign private issuers to provide information in exhibit
filings comparable to the information provided by domestic registrants
under Item 601(a)(5), Item 601(a)(6), Item 601(b)(4)(vi), Item
601(b)(10)(i), Item 601(b)(10)(iv), and Item 601(b)(21), as proposed.
In each case, we believe that the justifications for the proposed
amendments to Item 601 are equally applicable to Form 20-F.
---------------------------------------------------------------------------

    \224\ See International Disclosure Standards Release, Release
No. 33-7637 (Feb. 2, 1999) [64 FR 6261 (Feb. 9, 1999)] (expressing
the Commission's intention ``to conform the exhibit requirements for
Form 20-F with the exhibit requirements for registration statements
filed by U.S. issuers under the Exchange Act'' and stating that all
of the Form 20-F exhibit requirements ``are required for domestic
issuers filing a registration statement on Form 10 or an annual
report on Form 10-K'').
---------------------------------------------------------------------------

    We are not proposing similar changes to Form 40-F. Form 40-F
generally permits Canadian issuers to use Canadian disclosure documents
to satisfy the Commission's registration and disclosure requirements.
As a result, the exhibit requirements in Form 40-F are largely in
accordance with Canadian disclosure standards.
Request for Comment
    62. Should we amend the exhibit requirements of Form 20-F so that
they are consistent with the requirements under Item 601 as proposed?
Why or why not? Are there any unique considerations with respect to
foreign private issuers in this context?
    63. Should we make corresponding changes to the exhibit
requirements in Form 40-F? Why or why not?
    64. Would the proposed amendments conflict with home-country
requirements in some jurisdictions? If so, please explain.

F. Incorporation by Reference

    To reduce duplicative disclosure, registrants have been permitted
to incorporate previously filed information into their filings since
the enactment of the Securities Act and the Exchange Act.\225\
Initially, incorporation by reference was limited to exhibits, but over
time we have increasingly permitted incorporation by reference in other
contexts. The rules and instructions governing incorporation by
reference are now found in a variety of regulations, including
Regulation S-K, Regulation C, Regulation 12B and many of the
Commission's forms.
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    \225\ See Federal Trade Commission Release No. 33-47 (Sept. 22,
1933) (allowing for incorporation by reference of exhibits filed
with registration statements); Release No. 34-51 (Nov. 27, 1934)
(allowing for incorporation by reference of exhibits filed with the
Commission under the Exchange Act or filed with an exchange).
---------------------------------------------------------------------------

    In the FAST Act Report, the staff recommended that the Commission
consider consolidating, clarifying, and updating Item 10(d) of
Regulation S-K and the other rules governing incorporation by
reference.\226\ Consistent with our mandate under the FAST Act, our
proposed amendments would revise Item 10(d), Rule 411,\227\ Rule 12b-
23,\228\ and a number of our forms to simplify and modernize these
rules while still providing all material information. Our proposed
amendments would also rescind Rule 12b-32.\229\ In addition, to provide
for a consistent set of incorporation by reference rules for investment
companies and investment advisers, we are proposing parallel amendments
to Rule 0-4 \230\ and a number of forms under the Investment Company
Act,\231\ certain conforming amendments to Rule 0-6 \232\ under the
Investment Advisers Act,\233\ and the rescission of Rule 8b-23,\234\
Rule 8b-24,\235\ and Rule 8b-32 \236\ under the Investment Company Act
(certain provisions of which would be consolidated into proposed new
Rule 0-4). The proposed amendments would streamline the requirements
associated with incorporation by reference and facilitate investor
access to incorporated documents through the use of hyperlinks. The
proposed amendments are also consistent with the Commission's
longstanding acceptance of incorporation by reference in the interests
of encouraging registrants to eliminate duplicative disclosures.
---------------------------------------------------------------------------

    \226\ See FAST Act Report, supra note 2, at Recommendations A.1
and A.2.
    \227\ 17 CFR 230.411.
    \228\ 17 CFR 240.12b-23.
    \229\ 17 CFR 240.12b-32.
    \230\ 17 CFR 270.0-4.
    \231\ 15 U.S.C. 80a-1 et seq.
    \232\ 17 CFR 275.0-6.
    \233\ 15 U.S.C. 80b-1 et seq.
    \234\ 17 CFR 270.8b-23.
    \235\ 17 CFR 270.8b-24.
    \236\ 17 CFR 270.8b-32.
---------------------------------------------------------------------------

    Our proposed amendments respond to some of the recommendations from
commenters on the Concept Release. Commenters generally supported the
use of incorporation by reference.\237\ A number of commenters
recommended expanding the ability to incorporate by reference.\238\
Some commenters, while supporting the use of incorporation by
reference, cautioned that it should not excessively fragment disclosure
or make disclosure more difficult to access.\239\
---------------------------------------------------------------------------

    \237\ See Letters from Wachtell, Lipton, Rosen & Katz (May 16,
2016) (``Wachtell''); Ball Corporation (July 19, 2016) (``Ball'');
Chamber 2; FedEx; CGCIV; International Integrated Reporting Council
(July 20, 2016) (``IIRC''); California State Teachers' Retirement
System (July 21, 2016) (``CalSTRS''); Edison Electric and AGA;
American Federation of State, County and Municipal Employees (July
21, 2016) (``AFSCME''); Fenwick; and NIRI.
    \238\ See Letters from Wachtell; Chamber 2; FedEx; CGCIV; IIRC;
Edison Electric and AGA; Fenwick; IAC 1; and NIRI.
    \239\ See Letters from IIRC and CalSTRS. The IIRC recommended
emphasizing the use of incorporation by reference for
``supplementary'' information so as to focus the disclosure in a
document on ``core'' information.
---------------------------------------------------------------------------

1. Item 10(d)
    Item 10 of Regulation S-K \240\ contains general requirements on
the application of Regulation S-K. Item 10(d) focuses on incorporation
by reference.\241\ Item 10(d) states that, where rules, regulations, or
instructions to the forms permit incorporation by reference, a document
may be incorporated by reference to the specific document and to the
prior filing or submission in which that document was physically filed
or submitted. Item 10(d) generally prevents registrants from
incorporating by reference a portion of a document that itself also
incorporates pertinent information by reference.\242\ It also prohibits
incorporating documents by reference if they have been on file with the
Commission for more than five years and do not fall within one of the
exceptions provided in the rule.\243\
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    \240\ 17 CFR 229.10.
    \241\ 17 CFR 229.10(d).
    \242\ Indirect incorporation by reference is permitted when the
registrant is expressly required to incorporate a document by
reference and, in the case of asset-backed issuers, under Item
1100(c) of Regulation AB [17 CFR 229.1100(c)]. See Item 10(d).
    \243\ See infra note 247 and accompanying text (discussing the
exceptions).
---------------------------------------------------------------------------

    Consistent with the staff's recommendation in the FAST Act Report,
we are proposing to eliminate the five-year limit in Item 10(d). This
requirement originated from the Commission's policy on retention of
hard copy records of filings, as set forth in the Commission's Rules of
Practice.\244\ This requirement previously imposed a 10-year limit but
was reduced to five years in 1977 to allow for the Commission's
``orderly destruction of unneeded filings.'' \245\ At the time, the
Commission noted that the ``cost of storage outweighs the usefulness to
the Commission and to the public of many if not most of these
records.'' \246\ Nevertheless, exceptions were added for documents
contained in registration statements of reporting registrants and for
documents that a registrant identifies by file number that have not
been disposed of pursuant to the Commission's Records Control
Schedule.\247\ Given these broad exceptions and the current practice of
retaining documents electronically, the five-year limit now serves
little purpose and may lead to confusion about which documents may be
incorporated by reference.\248\
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    \244\ See Rules of Practice, Release No. 34-35833 (June 9, 1995)
[60 FR 32738 (June 23, 1995)] (moving the requirements from Rule 24
of the Commission's Rules of Practice to Item 10(d)). We are also
proposing to eliminate remaining references to Rule 24 in Regulation
S-K and other rules and forms. See, e.g., Rule 411(d) and Form N-2.
    \245\ See 25 FR 6719 (July 15, 1960) (adopting Rule 24);
Incorporation by Reference, Release No. 33-5818 (Mar. 18, 1977) [42
FR 16922 (Mar. 30, 1977)] (adopting an amendment to Rule 24 reducing
the 10-year limit to five years).
    \246\ Notice of (1) Proposed Amendments to Rule 24 of the Rules
of Practice and All Other Commission Rules Relating to Incorporation
By Reference and Basic Documents and (2) Proposed Revocation of
Securities Exchange Act Rule 12b-34, Release No. 33-5711 (May 21,
1976) [41 FR 105 (May 28, 1976)] (proposing a three-year limit with
certain ``basic documents'' being retained for a longer period).
    \247\ See Item 10(d)(1)-(2) and the Commission's Records Control
Schedule [17 CFR 200.80f].
    \248\ We believe that it is very unlikely that a registrant
would attempt to incorporate by reference to a document that was
filed with the Commission but is no longer available because it was
not submitted on EDGAR and has been destroyed pursuant to the
Records Control Schedule. For example, the Commission retains
Securities Act and Exchange Act registration statements, reports and
proxy materials that have not been filed on EDGAR for 30 years. See
Records Control Schedule [17 CFR 200.80f]. Under the proposed
amendments, a registrant would not be permitted to incorporate by
reference to a destroyed document because it would render its
disclosure incomplete, unclear, or confusing. See, e.g., proposed
Rule 411(e) and Rule 12b-23(e).
---------------------------------------------------------------------------

    Without the provisions relating to the five-year limit, little
substance remains in Item 10(d). Therefore, to simplify the
requirements, we are proposing to move the remaining provision in Item
10(d) prohibiting indirect incorporation by reference into the other
rules governing incorporation by reference.\249\ In the

FAST Act Report, the staff recommended consolidating the incorporation
by reference rules in Item 10(d). After considering this
recommendation, we believe that consolidating these procedural rules in
Regulation C and Regulation 12B (and, for investment companies and
investment advisers, in Rule 0-4 under the Investment Company Act and
Rule 0-6 under the Investment Advisers Act, respectively \250\) would
better align with the Commission's original intent of focusing
Regulation S-K on substantive disclosure requirements.\251\
---------------------------------------------------------------------------

    \249\ See the proposed amendments to Rule 411, Rule 12b-23, Rule
0-4, and Rule 0-6. Paragraph (d) of Item 10 also states that, when
incorporation by reference is permitted, a document may be
incorporated by reference to the specific document and to the prior
filing or submission in which such document was physically filed or
submitted. We are proposing to eliminate this provision because
similar provisions exist in Rule 411(d), Rule 12b-23(b), Rule 0-
4(c), and Rule 0-6(c).
    \250\ As part of these amendments, we are proposing amendments
to various Investment Company Act forms to eliminate references to
Item 10(d), along with outdated references in our forms and Rule 0-4
and Rule 0-6 to 17 CFR 228.10(f), a former rule under Regulation S-B
which was rescinded in 2007. See Smaller Reporting Company
Regulatory Relief and Simplification, Release No. 33-8876 (Dec. 19,
2007) [73 FR 934 (Jan. 4, 2008)].
    \251\ See FAST Act Report, supra note 2, at Recommendation A.2
(``These rules could be consolidated in Item 10(d) for submissions
that are required to comply with Regulation S-K.''). When the
Commission adopted the integrated disclosure system, it indicated
that it intended to bifurcate the regulations into procedural
requirements and substantive disclosure requirements. See Proposed
Revision of Regulation C, Registration and Regulation 12B,
Registration and Reporting, Release No. 33-6333 (Aug. 6, 1981) [46
FR 41971 (Aug. 18, 1981)] (``In its development of an integrated
disclosure system, the Commission has sought to consolidate
requirements relating to substantive disclosure and document content
in Regulation S-K. The proposals in this release reflect the
continuation of that process and also the effort to simplify and
consolidate procedural requirements in Regulations C and 12B.'');
Integrated Disclosure System Adopting Release, supra note 69 (``The
third aspect of the integrated disclosure system consists of
Regulation C and Regulation 12B, which contain the procedures to be
used in preparing and filing registration statements and reports
under the Securities Act and the Exchange Act, respectively.'').
Nevertheless, the rules governing incorporation by reference could
be consolidated in Regulation S-K. We are soliciting comment on
whether such an approach would be preferable.
---------------------------------------------------------------------------

Request for Comment
    65. Should we consolidate the requirements governing incorporation
by reference as proposed? Would the proposed structure of the
incorporation by reference rules be simpler for registrants,
particularly smaller registrants, to follow? Instead of preserving the
different rules for incorporation by reference under Regulation C and
Regulation 12B, should we combine Rule 411, Rule 12b-23, and Rule 12b-
32 in a single item of Regulation S-K? Would that facilitate or
streamline compliance with the rules?
    66. Should we eliminate Item 10(d)'s five-year limit on
incorporation by reference as proposed? Given the exceptions that exist
and the Commission's electronic filing requirements, is the five-year
limit obsolete? Would eliminating the five-year limit make it difficult
for investors to locate information that a registrant incorporates by
reference?
    67. For investment companies and investment advisers, should we
consolidate the different rules for incorporation by reference into
Rule 0-4 and Rule 0-6, respectively as proposed? Would this structure
be simpler for investment companies and investment advisers to follow,
or are there special considerations regarding investment companies and
investment advisers that make the current or another structure more
appropriate?
2. Securities Act Rule 411, Exchange Act Rule 12b-23 and Rule 12b-32
and Related Rules Under the Investment Company Act and Investment
Advisers Act
    Rule 12b-23 governs incorporation by reference for registration
statements filed pursuant to Sections 12(b) and 12(g) of the Exchange
Act and reports filed pursuant to Sections 13 and 15(d) of the Exchange
Act.\252\ Rule 12b-23 broadly allows for incorporation by reference in
answer, or partial answer, to any item of an Exchange Act registration
statement or report. Rule 12b-32 governs incorporation by reference for
exhibits filed with registration statements and reports. Rule 411
governs incorporation by reference for registration statements filed
under the Securities Act, including exhibits thereto.\253\ Rule 411
restricts incorporation by reference in a prospectus unless otherwise
provided in the appropriate form but allows for incorporation by
reference similar to Rule 12b-23 for the non-prospectus portions of a
registration statement.\254\
---------------------------------------------------------------------------

    \252\ See Rule 12b-1 [17 CFR 240.12b-1] (setting forth the scope
of Regulation 12B).
    \253\ See Rule 400 [17 CFR 230.400] (setting forth the scope of
Regulation C).
    \254\ See Integrated Disclosure System Adopting Release, supra
note 69; Proposed Revision of Regulation C, Registration and
Regulation 12B, Registration and Reporting, Release No. 33-6333
(Aug. 6, 1981) [46 FR 41971 (Aug. 18, 1981)] (``While it is
generally proper to prevent prospectuses from incorporating exhibits
which are not delivered, the Commission does not believe it is
necessary to impose such limits in connection with Exchange Act
reports which are not actually delivered in registered public
offerings of securities.'').
---------------------------------------------------------------------------

    Under the Investment Company Act, Rule 0-4 provides general
incorporation by reference rules for investment company registration
statements, applications, and reports filed with the Commission. Rule
8b-23 (additional incorporation by reference rules for registration
statements and reports), Rule 8b-24 (rules regarding summaries or
outlines of documents), and Rule 8b-32 (incorporation of exhibits by
reference) provide additional incorporation by reference rules for
investment company registration statements and reports. Under the
Investment Advisers Act, Rule 0-6 governs incorporation by reference
for investment adviser applications for Commission orders under the
Investment Advisers Act other than applications for registration as an
investment adviser.
a. Exhibit and Other Filing Requirements
    Rule 12b-23(a)(3) under the Exchange Act requires that copies of
any information incorporated by reference must be filed as an exhibit,
with limited exceptions.\255\ This provision was introduced in 1971 so
that then-existing microfiche technology for the public dissemination
of reports and documents filed with the Commission could function
properly.\256\ Rule 411(b)(4) under the Securities Act has a more
limited exhibit filing provision for non-prospectus information that is
incorporated by reference into a document that does not comply with the
five-year limit in Item 10(d). Rule 8b-23 under the Investment Company
Act generally requires investment company registrants to file with a
registration statement or report a copy of any registration statement,
report, or prospectus from which information is incorporated by
reference, except in cases where the registration statement, report, or
prospectus was filed electronically.\257\ We are proposing to

eliminate these requirements, consistent with commenters' suggestions
and the staff's recommendation in the FAST Act Report to make the rules
for incorporation by reference more consistent, and to apply consistent
rules for incorporation by reference under the Investment Company Act
and Investment Advisers Act.\258\ We no longer believe that these
requirements are necessary as most Exchange Act filings are made
publicly available on EDGAR, and as we generally do not have similar
exhibit filing requirements for Securities Act registration
statements.\259\
---------------------------------------------------------------------------

    \255\ See Rule 12b-23(a)(3) [17 CFR 240.12b-23(a)(3)](providing
exceptions for a proxy or information statement incorporated by
reference in response to Part III of Form 10-K, a form of prospectus
filed pursuant to Rule 424(b) [17 CFR 230.424(b)] incorporated by
reference in response to Item 1 of Form 8-A, and information filed
on Form 8-K).
    \256\ See Registration and Reporting and Form for Annual Reports
of Employee Stock Purchase Plans, Release No. 34-9048 (Jan. 4, 1971)
[36 FR 4483 (Mar. 6, 1971)] (``In order that the microfiche system
for the public dissemination of reports and documents filed with
[the] Commission may work, the amended rule requires that copies of
information or financial statements incorporated by reference, or
copies of the pertinent pages of any document containing such
information or statement, be filed with the registration statement
or report in which it is so incorporated.'').
    \257\ See Rule 8b-23(a) [17 CFR 270.8b-23(a)]. In addition, Rule
0-4 under the Investment Company Act and Rule 0-6 under the
Investment Advisers Act permit the incorporation by reference as an
exhibit in any registration statement, application or report (in the
case of Rule 0-4) or in any application (in the case of Rule 0-6)
any document or part thereof previously or concurrently filed with
the Commission. Both rules also permit the incorporation by
reference of financial statements (or parts thereof), although Rule
0-6 specifies that the financial statements (or parts thereof) that
are incorporated are to be filed as exhibits. For consistent rules
under both Acts, we are proposing amendments to Rule 0-4 to specify
that financial statements may be filed as exhibits to investment
company applications, as Rule 0-6 currently specifies with respect
to applications filed under the Investment Advisers Act.
    Furthermore, if the number of copies of any document from which
information is incorporated by reference is less than the number of
copies required to be filed with a registration statement,
application, or report, Rule 0-4 and Rule 0-6 require an investment
company or applicant, respectively, to file as many additional
copies of the document incorporated by reference as may be necessary
to meet the requirements of the registration statement, application,
or report. See Rule 0-4(a), Rule 0-6(a). We are proposing to
eliminate the requirement to file additional copies from Rule 0-4
because most investment company filings are available on EDGAR.
Although investment adviser applications are filed in paper format,
in the staff's experience, those applications rarely incorporate by
reference information as permitted by Rule 0-6. For our regulatory
purposes, we do not believe that the number of copies specified in
current Rule 0-6 is needed. Thus, for the foregoing reasons and for
consistency purposes, we are similarly proposing to eliminate the
requirement to file additional copies from Rule 0-6.
    \258\ See Letters from ABA and Fenwick. See also FAST Act
Report, supra note 2, at Recommendation A.2.
    \259\ We note that investment advisers register and submit some
filings to the Commission electronically through the Investment
Adviser Registration Depository (``IARD'').
---------------------------------------------------------------------------

    In connection with these proposed amendments, we are also proposing
to eliminate the corresponding exhibit requirement in Item
601(b)(99)(ii) of Regulation S-K, which was adopted in connection with
Rule 12b-23(a) and Rule 411(b)(4).\260\ In addition to Item 601(b)(99),
other provisions in Item 601 require documents to be filed as exhibits
only when they are incorporated by reference into a filing. For
example, Item 601(b)(13) requires a registrant to file an annual report
to security holders, Form 10-Q or quarterly report to security holders
as an exhibit when the registrant incorporates all or a portion of such
reports by reference. Although annual reports to security holders are
readily available to investors and the staff outside of EDGAR, we
believe it is appropriate to retain the exhibit requirement in these
circumstances because some registrants satisfy their disclosure
requirements by incorporating a significant amount of disclosure from
these reports. We are not proposing to eliminate these other exhibit
filing requirements in Item 601. Nonetheless, we are proposing to
eliminate the requirement in Item 601(b)(13) to file a Form 10[dash]Q
as an exhibit when it is specifically incorporated by reference into a
prospectus. This provision would no longer be necessary because, under
the proposed rules, a registrant would be required to include a
hyperlink to any information that is incorporated by reference to a
document available on EDGAR.\261\
---------------------------------------------------------------------------

    \260\ See Integrated Disclosure System Adopting Release, supra
note 69 (adopting Item 601(b)(28)(ii), which is now found in Item
601(b)(99)(ii)) and Proposed Revision of Regulation S-K and Proposed
Rescission of Guides for the Preparation and Filing of Registration
Statements and Reports, Release No. 33-6332 (Aug. 6, 1981) [46 FR
41925 (Aug. 18, 1981)].
    \261\ See infra Section II.F.2.b. (Incorporation by Reference--
Hyperlinks).
---------------------------------------------------------------------------

Request for Comment
    68. Should we eliminate the requirement in Rule 12b-23(a)(3) and
Rule 411(b)(4) that copies of information incorporated by reference be
filed as exhibits to registration statements or reports? Would
eliminating these requirements encourage incorporation by reference as
suggested by some commenters? \262\ Would eliminating the requirement
make it difficult for investors to locate the incorporated information
on EDGAR?
---------------------------------------------------------------------------

    \262\ See Letters from ABA and Fenwick.
---------------------------------------------------------------------------

    69. Should we modify, as proposed, the exhibit filing provisions in
Rule 0-4, Rule 8b-23, and Rule 0-6 regarding materials incorporated by
reference? Are there special considerations regarding investment
companies and applications under the Investment Advisers Act that merit
maintaining or modifying the current provisions we are proposing to
eliminate? Should we specify in Rule 0-4, as proposed, that financial
statements may be filed as exhibits to investment company applications,
as Rule 0-6 currently specifies with respect to applications filed
under the Investment Advisers Act? Given that applications under the
Investment Advisers Act are filed with the Commission in paper, should
our final rules continue to require the filing of additional copies of
materials incorporated by reference?
    70. Some documents are required to be filed as exhibits only when
they are incorporated by reference into a filing. For example, Item
601(b)(13) requires an annual report to security holders to be filed as
an exhibit to a Form 10-K when all or part of the annual report is
incorporated by reference into the text of Form 10-K. Should we amend
Item 601(b)(13) or other provisions in Item 601 to eliminate these
requirements (or is the proposed elimination of Rule 12b-23(a)(3)
sufficient to encourage incorporation by reference)? Please address the
availability of the information called for by Item 601 to investors and
the Commission in your response.\263\
---------------------------------------------------------------------------

    \263\ For example, annual reports are required to be delivered
to security holders. See Rule 14a-3(b) and Rule 14c-3(a) [17 CFR
240.14a-3(b) and 14c-3]. Such reports must also be provided to the
Commission. See Rule 14a-3(c) [17 CFR 240.14a-3] and Rule 14c-3(b)
(requiring hard copies of these reports to be delivered to the
Commission).
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b. Hyperlinks
    Consistent with the recommendation of commenters and the staff, we
are proposing to facilitate greater investor access to disclosure by
amending Rule 411, Rule 12b-23, and Rule 0-4 to require hyperlinks to
information that is incorporated by reference if that information is
available on EDGAR.\264\ The Commission recently adopted rules
requiring hyperlinks to most exhibits filed pursuant to Item 601, Form
F-10 \265\ or Form 20-F.\266\ To accommodate hyperlinks, those filings
must be made in HTML format.\267\ The requirement to file documents in
HTML format would be expanded under the proposed rules to include
filings that are subject to the proposed hyperlinking requirements in
Rule 411, Rule 12b-23, and Rule 0-4.\268\ We believe that

expanding the hyperlinking requirement to other information that is
incorporated by reference would improve the readability and
navigability of disclosure documents and discourage repetition,
consistent with our FAST Act mandate.
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    \264\ See Letters from Chamber; FedEx; Fenwick; and CGCIV. See
also FAST Act Report, supra note 2, at n.34. We are not proposing
similar amendments to Rule 0-6 because applications under the
Investment Advisers Act filed pursuant to that rule are not required
to be filed electronically. In addition, applications filed pursuant
to Rule 0-6 may incorporate information that may not be filed on
EDGAR.
    \265\ 17 CFR 239.40.
    \266\ See Exhibit Hyperlinks Adopting Release, supra note 14, at
14130.
    \267\ See id. at 14130. Larger registrants were required to
comply with the rules requiring exhibit hyperlinks for filings
submitted on or after September 1, 2017. Id. The rules we adopted at
that time did not generally apply to investment companies. However,
as discussed below, we are proposing to apply similar requirements
to certain filings by investment companies in this release. See
infra Section II.G.2.
    \268\ See proposed Rule 105(e) of Regulation S-T. We do not
believe that the proposed amendments would significantly increase
the number of filings that must be in HTML format. Filings that are
not subject to Rule 411 or Rule 12b--23, such as proxy statements on
Schedule 14A, would not be affected by this proposal.
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    The proposed requirements for hyperlinking are similar to the
requirements for exhibit hyperlinking. Specifically, under the proposed
amendments, registrants would not be required to file an amendment to a
document solely to correct an inaccurate hyperlink unless, that
hyperlink was included in a pre-effective registration statement. An
inaccurate hyperlink alone would neither render the filing materially
deficient nor affect a registrant's eligibility to use Form S-3 \269\
or Form F-3.\270\ Lastly, we are not proposing to require refiling of
information that is incorporated by reference from a document that was
previously filed with the Commission in paper. Similar to our reasoning
in the Exhibit Hyperlinks Adopting Release, we believe that requirement
would have limited utility given that electronic filing has been
required for over two decades and paper filings are currently made in
very limited circumstances.\271\
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    \269\ 17 CFR 239.13.
    \270\ 17 CFR 239.33.
    \271\ See Exhibit Hyperlinks Adopting Release, supra note 14, at
14131. See also FAST Act Report, supra note 2, at n.31 and
accompanying text.
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    Unlike the requirements for exhibit hyperlinking, however, a
registrant would not be required to correct inaccurate hyperlinks in an
effective registration statement by including a corrected hyperlink in
a subsequent periodic report or a post-effective amendment. We
preliminarily believe that it would result in more confusion than
clarity if we were to require registrants to re-file disclosure to
correct a hyperlink or to include a section solely devoted to corrected
hyperlinks in the body of a periodic report or post-effective
amendment. This differs from exhibit hyperlinks where the corrected
hyperlink would be unobtrusively located in the exhibit index with
other exhibits. The requirement in proposed Rule 411, Rule 12b-23, and
Rule 0-4 to describe the location of the information incorporated by
reference should mitigate the impact of any inaccurate hyperlinks.
Request for Comment
    71. As proposed, in most cases a registrant would be required to
include a hyperlink to information that it incorporates by reference.
Would the proposed hyperlinking requirements significantly increase the
compliance burden on registrants? Should we provide a delayed
compliance date for smaller reporting companies and ASCII filers? \272\
If so, what compliance date would be appropriate? Should we provide any
exceptions to the proposed hyperlinking requirement? For example,
should we exclude references to entire forms that are readily
accessible on EDGAR, such as Form 10-K, or for particular types of
disclosure? If so, which forms or types of disclosure would be
appropriate and why?
---------------------------------------------------------------------------

    \272\ See Exhibit Hyperlinks Adopting Release, at 14130.
---------------------------------------------------------------------------

    72. Should investment companies be required to include a hyperlink
to information incorporated by reference as proposed? Are there special
considerations regarding filings by investment companies that merit
modifying the requirement in any way? For example, should investment
company applications be required to include a hyperlink to information
that is incorporated by reference?
    73. When should registrants be required to update inaccurate
hyperlinks? Should these updating requirements differ from the
requirements to update inaccurate exhibit hyperlinks as proposed? \273\
Should we instead require registrants to update hyperlinks in a post-
effective amendment or subsequent periodic report?
---------------------------------------------------------------------------

    \273\ See Exhibit Hyperlinks Adopting Release, supra note 14, at
n.73.
---------------------------------------------------------------------------

    74. Should we amend our forms to clarify that information
incorporated by reference must include a hyperlink to where that
information may be found on EDGAR? Would the requirements be
sufficiently clear if we include them only in the rules as proposed?
c. Financial Statements
    In addition to addressing incorporation by reference, the FAST Act
Report recommended that we consider revising our rules and forms to
allow for consistent cross-referencing to disclosure found elsewhere in
a filing.\274\ To address the concern that cross-referencing to non-
financial information from within the financial statements may raise
questions about the scope of an audit or review, the staff recommended
that we consider prohibiting the use of such cross-referencing. Several
commenters on the Concept Release also supported using cross-references
to reduce repetitive disclosure while recommending that the Commission
clarify or delineate what information constitutes the set of audited or
reviewed financial statements.\275\
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    \274\ See FAST Act Report, supra note 2, at Recommendation A.2.
    \275\ See Letters from Deloitte & Touche LLP (July 15, 2016);
CAQ; Ernst & Young 3; PNC; Grant Thornton LLP (July 21, 2016); KPMG;
PWC; Crowe Horwath LLP (July 21, 2016) (``Crowe Horwath''); and CFA
Institute.
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    In most cases, there is no prohibition on cross-referencing to or
incorporating information from the financial statements to satisfy the
narrative disclosure requirements of Regulation S-K.\276\ In some cases
cross-referencing is specifically permitted.\277\ Therefore, although
we encourage registrants to make use of the disclosure in their
financial statements to satisfy other disclosure requirements,\278\ we
are not proposing clarifying amendments to our rules or forms to
address incorporation by reference from the financial statements at
this time.
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    \276\ Although Rule 411 restricts incorporation by reference in
a prospectus, it does not prohibit cross-references within a
prospectus. Also, Securities Act forms, such as Forms S-1 and S-3,
permit incorporation by reference in the prospectus if specified
conditions are met.
    \277\ See, e.g., Item 101(b) and Item 101(d)(2) of Regulation S-
K [17 CFR 229.101(b) and (d)(2)].
    \278\ For example, disclosure about legal proceedings,
transactions with related persons and matters relevant to MD&A might
be disclosed in the financial statements.
---------------------------------------------------------------------------

    By contrast, where financial statements cross-reference or
incorporate information from outside the financial statements, it can
raise questions as to the scope of an auditor's responsibilities.\279\
To address this concern, we are proposing amendments to our rules and
forms that would prohibit that type of incorporation by reference or
cross-referencing.\280\ These amendments would not prohibit cross-
references to other parts of a filing when otherwise specifically
permitted by our rules.\281\ These amendments would also not prohibit
incorporating financial information from other filings to satisfy

financial reporting requirements when otherwise permitted or
required.\282\
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    \279\ See supra note 275 and accompanying text.
    \280\ See our proposed amendments to Rule 411, Rule 12b-23, and
Rule 0-4 and Securities Act Forms S-1, S-3, S-11, and F-1. This
approach would also avoid the concern raised by one commenter that
registrants may lose their Securities Act Section 27A [15 U.S.C.
77z-2] safe harbor by cross-referencing to the body of a periodic
report within their financial statements. See Letter from General
Motors. Because Rule 0-6 governs incorporation by reference only for
applications filed under the Investment Advisers Act, we are not
proposing to make similar amendments to that rule, but request
comment on whether the final rule should include such provision.
    \281\ For example, registrants would continue to be permitted to
include cross-references in the financial statements to information
outside of the financial statements about segments when that
information conforms with generally accepted accounting principles.
See Item 101(b) of Regulation S-K.
    \282\ For example, registrants using Form S-3 would continue to
be permitted to incorporate financial statements filed with a Form
8-K that reports the acquisition of a significant business. Also,
registrants using Form S-4 to report a merger with another
registrant would continue to be able to incorporate the financial
statements of the registrant filed on Form 10-K and Form 10-Q.
---------------------------------------------------------------------------

    We are also proposing an amendment to Rule 0-4 that, except as
provided in the Commission's rules, would restrict the incorporation of
financial information required to be given in comparative form for two
or more fiscal years or periods unless the information incorporated by
reference includes the entire period for which the comparative data is
given.\283\ We are proposing this amendment to provide for consistency
with similar restrictions under both current and proposed Rule 411 and
Rule 12b-23 and request comment on whether this amendment is
appropriate.
---------------------------------------------------------------------------

    \283\ See proposed Rule 0-4(b).
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Request for Comment
    75. Should we amend our rules or forms to clarify or expand when
financial statement disclosure may be used to satisfy other disclosure
requirements? If so, are there particular areas of disclosure that we
should address?
    76. To clarify the scope of the financial statements and an
auditor's responsibilities, we have proposed prohibiting registrants
from incorporating or cross-referencing information outside of the
financial statements into their financial statements unless otherwise
specifically permitted or required by the Commission's rules. Is the
proposed approach appropriate or would an alternative approach better
achieve this goal? Should we provide other exceptions to the proposed
rule?
    77. Are the proposed amendments appropriate for investment
companies? Do investment companies raise special considerations that
our rules and forms should address? Should we amend Rule 0-6 to provide
for similar rules regarding the incorporation by reference of financial
statements into applications under the Investment Advisers Act? Why or
why not?
d. Other Amendments
    We are also proposing several non-substantive changes to Rule 411,
Rule 12b-23 and Rule 0-4 to streamline, clarify, and conform these
rules. One of these proposed changes relates to the current provisions
governing how financial information from another filing may be
incorporated by reference.\284\ Rule 12b-23 states that financial
information incorporated by reference must comply with the requirements
of the form or report into which it is incorporated. Rule 411 and Rule
0-4 contain similar language.\285\ These provisions could be read to
imply that the financial statements must comply with the form on which
they were originally filed, rather than the form into which they are
being incorporated. We are proposing to eliminate these provisions
because all information, not just information incorporated by reference
or financial information, must comply with the requirements of the form
in which it is used unless otherwise permitted by rule or statute.
---------------------------------------------------------------------------

    \284\ See Rule 411(b)(2) (discussing the incorporation by
reference of financial information in the non-prospectus portion of
a registration statement) and Rule 12b-23(a)(1).
    \285\ Similar language also exists in Rule 8b-23, which we are
proposing to rescind.
---------------------------------------------------------------------------

    The proposed amendments would also eliminate several redundant
provisions in Rule 411 and Rule 12b-23. Rule 411(b) provides that
information may be incorporated by reference in answer, or partial
answer, to any item that calls for information not required to be
included in a prospectus ``subject to the following provisions.''
Although presented as conditions to using incorporation by reference,
the provisions that follow mostly discuss situations where
incorporation by reference is permitted by other parts of these rules.
For example, Rule 411(b)(1) states that non-financial information may
be incorporated by reference to any document in response to the non-
prospectus disclosure requirements in filings under the Securities Act.
Rule 12b-23(a) contains a similar structure for any item of a
registration statement or report. Further, Rule 411(b)(3) (for non-
prospectus disclosure requirements) and Rule 12b-23(a)(2) both state
that incorporating information by reference to other parts of the same
filing is generally permitted. Incorporation by reference in all of
these contexts is permitted by the broader provisions of Rule 411(b)
and Rule 12b-23(a). Accordingly, we are proposing to eliminate
paragraphs (b)(1) and (b)(3) of Rule 411 and paragraph (a)(2) of Rule
12b[dash]23, as these provisions are unnecessary.
    We are also proposing to move the provisions relating to
incorporating exhibits by reference from Rule 12b-32 into Rule 12b-23.
Previously, Regulation C had a bifurcated structure, similar to Rule
12b-32 and Rule 12b-23, with both Rule 411 and Rule 447 governing the
incorporation of exhibits by reference for Securities Act filings. Rule
447 was consolidated into Rule 411 in 1982.\286\ Although Rule 12b-32
is currently found under the exhibits subheading of Regulation 12B, we
believe that reducing the number of separate rules governing
incorporation by reference would simplify compliance. We are not
proposing any substantive changes to Rule 12b-32.\287\
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    \286\ See Integrated Disclosure System Adopting Release, supra
note 69.
    \287\ The proposed amendments would conform the language of Rule
12b-32 (as incorporated into Rule 12b-23) with similar language
currently found in Rule 411(c). References to 17 CFR 228.10(f),
which no longer exists, would be eliminated.
---------------------------------------------------------------------------

    For similar reasons, we are proposing to move the provisions
relating to incorporating exhibits by reference from Rule 8b-32 into
Rule 0-4, with one exception.\288\ Under Rule 8b-32(c), an investment
company may only incorporate by reference into a registration statement
or report required to be filed electronically an exhibit that was filed
in electronic format, unless the exhibit was filed in paper under a
hardship exemption and any required confirming copy has been
submitted.\289\ Given that EDGAR is now the primary method for the
filing of investment company registration statements, applications, and
reports with the Commission and our rules require the filing of
electronic format copies of paper format documents filed under a
hardship exemption,\290\ this provision is obsolete, and therefore, we
are proposing to eliminate it.\291\
---------------------------------------------------------------------------

    \288\ As with the proposed amendments to Rule 12b-23, we are
proposing to conform the language of paragraphs (a) and (b) of Rule
8b-32 (as incorporated into Rule 0-4) with similar language
currently found in Rule 411(c). References to 17 CFR 228.10(f),
which no longer exists, would similarly be eliminated.
    \289\ See Rule 8b-32(c).
    \290\ See, e.g., Rule 201(b) of Regulation S-T [17 CFR
232.201(b)], Notes 2 and 3 to Rule 202 of Regulation S-T [17 CFR
232.202].
    \291\ See paragraph (a)(iv) of Rule 101 of Regulation S-T [17
CFR 232.101] (specifying the investment company filings required to
be submitted electronically).
---------------------------------------------------------------------------

    We are also proposing additional modifications to Rule 0-4 and Rule
0-6 to modernize and simplify these rules. First, we are proposing to
eliminate the requirement that if a certificate of an independent
public accountant previously or concurrently filed is incorporated by
reference by an investment company (with respect to the filing of a
registration statement, application, or report) or an investment
adviser (with respect to the filing of an application) a written
consent of the accountant must be filed with the filing.\292\ We note
that Rule 439 under

the Securities Act \293\ provides a similar requirement for these types
of consents for registration statements under the Securities Act. We
further note that our investment company registration forms do not
require the filing of these consents where a registration statement or
amendment is filed only under the Investment Company Act.\294\ We are
unaware of circumstances under which a consent would be required in
connection with an investment company report or an application filed by
an investment company or investment adviser. Therefore, we are
proposing to eliminate this requirement from Rule 0-4 and Rule 0-6 but
request comment on whether the final rules should retain it.
---------------------------------------------------------------------------

    \292\ See Rule 0-4(b), Rule 0-6(b).
    \293\ 17 CFR 239.439.
    \294\ See, e.g., General Instruction B.2(b) of Form N-1A.
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    Second, we are proposing to eliminate the restrictions currently
contained in Rule 0-4(d) and Rule 0-6(d) on incorporating by reference
exhibits or financial statements made in certain filings.\295\ Given
that EDGAR is now the primary method for the filing of registration
statements and reports with the Commission, and that documents filed on
EDGAR remain available regardless of whether a filing is withdrawn,
whether a registration statement ceases to be effective, and whether
the other circumstances outlined in Rule 0-4(d) and Rule 0-6(d) apply
to a particular filing, these provisions are no longer necessary.\296\
For our regulatory purposes, we do not believe that the restrictions
are needed. Thus, for the foregoing reasons and for consistency
purposes, we are proposing to eliminate this provision from Rule 0-4
and Rule 0-6 but request comment on whether the final rules should
retain it.
---------------------------------------------------------------------------

    \295\ Specifically, the rules restrict the incorporation by
reference of exhibits or financial statements which (1) have been
withdrawn, (2) were filed in connection with certain registration
statements that have ceased to be effective, (3) are contained in
filings subject to pending proceedings under (i) Section 8(b) or
8(d) of the Securities Act, (ii) Section 8(e) of the Investment
Company Act, (iii) in the case of applications under Rule 0-6,
Section 203(e)(1) of the Investment Advisers Act, or (iv) orders
under any of the foregoing, and (4) in the case of investment
companies, were documents filed in paper and with respect to an
electronic filer under a temporary hardship exemption under Rule 201
of Regulation S-T and an electronic copy has not been submitted.
    \296\ As noted earlier, investment advisers register and submit
some filings to the Commission electronically through IARD.
---------------------------------------------------------------------------

    Finally, we are proposing to eliminate the provisions currently
contained in Rule 0-4(e) and Rule 0-6(e). These provisions provide that
the Commission may refuse to permit incorporation by reference in any
case in which, in the Commission's judgment, such incorporation would
render a registration statement or report of an investment company or
an application filed by an investment adviser incomplete, unclear, or
confusing. Instead, for consistency with proposed Rule 411(e) and
proposed Rule 12b-23(e), we are proposing to amend Rule 0-4 and Rule 0-
6 to contain a general requirement that information must not be
incorporated by reference in any case where such information would
render the disclosure incomplete, unclear, or confusing.\297\
---------------------------------------------------------------------------

    \297\ See proposed Rule 0-4(e), proposed Rule 0-6(b). A
substantially similar provision exists in current Rule 8b-23(c)
(which we are proposing to rescind) pertaining to information
incorporated by reference into an investment company registration
statement or report.
---------------------------------------------------------------------------

Request for Comment
    78. We are proposing to eliminate several redundant parts of the
rules that address incorporation by reference. Are those provisions
helpful to understanding whether and when incorporation by reference is
permitted? Should we include those provisions in instructions to the
rules or in other guidance?
    79. Are the proposed amendments appropriate with respect to
investment companies, or do investment companies raise special
considerations that our rules should address? For example, should our
rules maintain the current restriction contained in Rule 8b-32(c)
regarding exhibits filed as part of registration statements and reports
required to be filed electronically? Should our rules retain the
current requirement that a consent be filed where an independent public
accountant certificate is incorporated by reference? Should our rules
retain the current prohibitions on incorporating by reference
information filed as part of certain filings specified in Rule 0-4(d)
and Rule 0-6(d)? In these cases, should our rules retain the current
provisions of our rules, or should they be modified in any way? If so,
how?
    80. Are the proposed amendments to Rule 0-4 and Rule 0-6 sufficient
to help ensure that information incorporated by reference into a
registration statement, report, or application does not render the
disclosure in these documents incomplete, unclear, or confusing? If so,
should we, as proposed to provide regulatory consistency between
operating companies on the one hand and investment companies and
investment advisers on the other, eliminate the current provisions in
Rule 0-4(e) and Rule 0-6(e) that the Commission may refuse to permit
incorporation by reference in any case in which in its judgment the
incorporation would render a registration statement, report, or
application incomplete, unclear, or confusing? Why or why not? If
retained, should the provisions be modified in any way, and if so, how?
    81. Are the proposed rules governing incorporation by reference
under the Investment Company Act or Investment Advisers Act
sufficiently clear? Should we modify them in any other respect? For
example, should our rules expressly permit or prohibit information to
be incorporated into the body of an application?
3. Forms
    Incorporation by reference is also addressed in our forms.\298\
Accordingly, we are proposing revisions to several of the Commission's
forms to implement the proposed amendments discussed above. In addition
to conforming changes, we are proposing amendments to Form 10, Form 10-
K and Form 20-F to allow registrants to exclude item numbers and
captions or to create their own captions tailored to their
disclosure.\299\ The proposed amendments would not affect captions that
are expressly required by the forms or Regulation S[dash]K. For
example, Form 10-K and Form 20-F require captions for ``audit fees,''
``audit-related fees,'' ``tax fees,'' and ``all other fees.''
Regulation S-K requires a caption for ``risk factors.'' \300\ These
proposed amendments are intended to reduce the use of unnecessary
cross-references

when information may be responsive to more than one disclosure item in
the Exchange Act forms.\301\
---------------------------------------------------------------------------

    \298\ Although, as stated above, Rule 411, Rule 12b-23 and Rule
12b-32 generally govern incorporation by reference for filings
subject to Regulation C or Regulation 12B, provisions in the forms
that cover the same subject matter are controlling. See Rule 400 [17
CFR 230.400] (stating that the provisions in a form, or an item of
Regulation S-K referred to in such form, will control when they
cover the same subject matter as a rule in Regulation C, unless
otherwise specifically provided in Regulation C) and Rule 12b-1
(stating that provisions in a form will control when they cover the
same subject matter as a rule in Regulation 12B).
    \299\ Rule 12b-13 requires registrants to include the numbers
and captions of all items in these forms. Although provisions in a
form control when they cover the same subject matter as a rule in
Regulation 12B, these forms do not contradict Rule 12b-13.
    \300\ The proposed amendments are not intended to change
instances where the staff has interpreted a requirement to allow for
a caption to be excluded. See, e.g., Regulation S-K Compliance and
Disclosure Interpretation 233.02 (discussing the caption called for
by Item 407(e)(4)). The proposed amendments would also not eliminate
General Instruction G.4 of Form 10-K, which requires captions when
the registrant incorporates all of the information in its Form 10-K
by reference to its annual report to security holders and its
definitive proxy or information statement. In connection with this
proposal, we are also proposing to amend Rule 12b-13 to make it
clearer that the provisions of a form control over the requirements
of that rule.
    \301\ A commenter recommended amending our rules to include a
``policy'' on avoidance of duplication that would clarify that a
registrant is not required to repeat or include cross-references to
disclosure found elsewhere in a document when responding to specific
line item requirements; however, we believe amending our forms in
the manner proposed would provide clearer guidance for registrants.
See Letter from ABA.
---------------------------------------------------------------------------

    While item numbers and captions are generally not required in the
prospectus portion of most Securities Act filings, they are required in
many Exchange Act forms.\302\ Although clear disclosure will often call
for appropriate headings or captions, the proposed amendments would
provide registrants with more flexibility in how they present their
disclosure. Increasing flexibility in this manner may reduce repetitive
disclosure or unnecessary cross-references when information may be
responsive to more than one item and thereby enhance the overall
readability of required disclosures.
---------------------------------------------------------------------------

    \302\ See Securities Act Rule 404 [17 CFR 230.404] and Exchange
Act Rule 12b-13 [17 CFR 240.12b-13]. Rule 404 does not require the
numbers or captions of items to be included in a prospectus, but
does require them for the non-prospectus portion of a registration
statement. See Rule 404(d).
---------------------------------------------------------------------------

Request for Comment
    82. Should we amend Form 10, Form 10-K, and Form 20-F to eliminate
the requirements to include most item numbers and captions as proposed?
Would the proposed amendments to these forms lead to disclosure that is
less clear or less comparable across registrants? Under the proposed
amendments, a few required captions would remain, such as the caption
for ``risk factors'' and the captions required by General Instructions
G.4 of Form 10-K.\303\ Should we retain these requirements, or should
they also be eliminated?
---------------------------------------------------------------------------

    \303\ See supra note 300 and accompanying text.
---------------------------------------------------------------------------

    83. Would increasing flexibility in how the disclosure in Form 10,
Form 10-K, and Form 20-F is presented lead to less repetitive
disclosure? Should we eliminate the requirements to include item
numbers and captions in other forms, such as in Part II of Form 10-Q or
in Form 8-K?
    84. In addition to or in lieu of eliminating the requirements for
most item numbers and captions, should we amend our rules to provide
guidance on the use of cross-references, as suggested by one commenter?
\304\ If so, how should the guidance discourage excessive cross-
referencing while acknowledging that some cross-references may be
necessary to provide clear disclosure? Should the cross-referencing
guidance differ based on the nature of the document or the disclosure?
For example, should the guidance treat a prospectus differently from a
Form 10-K filing, or treat information in the financial statements
differently from narrative disclosure?
---------------------------------------------------------------------------

    \304\ See Letter from ABA.
---------------------------------------------------------------------------

    85. The proposed amendments would not alter the general rule that a
prospectus may not incorporate information by reference unless
permitted by the appropriate form. Our forms, however, typically
provide registrants with significant latitude to incorporate
information by reference when specified conditions are met.\305\ Should
we change the information that may be incorporated by reference into a
prospectus under any of our forms? If so, which information, and why?
---------------------------------------------------------------------------

    \305\ For example, subject to certain conditions, Form S-1
allows registrants to incorporate information by reference in most
of the items of Part I--Information Required in Prospectus. See
General Instruction VII and Item 12 of Form S-1.
---------------------------------------------------------------------------

G. Manner of Delivery 306
---------------------------------------------------------------------------

    \306\ After consideration of the staff's recommendation G.2. in
the FAST Act Report, we are not, at this time, proposing to require
the use of external hyperlinks whenever our rules call for the
inclusion of an internet address. In the FAST Act Report, the staff
recommended requiring external hyperlinks provided that the
appropriate technology is available to prevent these hyperlinks from
jeopardizing the security and integrity of the EDGAR system. See
FAST Act Report, supra note 2, at n.15.
---------------------------------------------------------------------------

1. Tagging Cover Page Data
    Currently, operating company registrants are required to file their
financial statements as an exhibit in a machine-readable format using
eXtensible Business Reporting Language (``XBRL'').\307\ This disclosure
is required as an exhibit to periodic reports and Securities Act
registration statements, including reports on Form 8-K or Form 6-K that
contain revised or updated financial statements.
---------------------------------------------------------------------------

    \307\ For domestic disclosure forms, the XBRL data-tagging
requirements are imposed through Item 601(b)(101) of Regulation S-K
and Rule 405(b) of Regulation S-T. See Item 601(b)(101) of
Regulation S-K and Rule 405(b) of Regulation S-T [17 CFR
232.405(b)]. For foreign disclosure forms, analogous XBRL tagging
requirements are included in the instructions to the relevant forms.
See, e.g., paragraphs 100 and 101 of the Instructions to Exhibits to
Form 20-F.
---------------------------------------------------------------------------

    Registrants must also tag in XBRL a specific group of data points
that appears on the cover page of the filing. These specific data
points, which are tagged according to Regulation S-T and the EDGAR
Filer Manual, are known as document and entity identifier elements
(``DEIs'') and include, among others, form type, company name, filer
size, and public float.\308\ This information corresponds to some, but
not all, of the information that registrants are required to include on
the filing cover page. For example, the Form 10[dash]K cover page
contains approximately 25 data points. Less than half of those data
points are currently required to be tagged in XBRL. The non-tagged data
points include, among others, the exchange on which securities are
registered and the state (or jurisdiction) of incorporation.
---------------------------------------------------------------------------

    \308\ See Rule 405 of Regulation S-T [17 CFR 232.405]; See also
Interactive Data to Improve Financial Reporting, Release No. 33-9002
(Jan. 30, 2009) [74 FR 15666] (discussing the requirement to tag
document and entity identifier elements, such as form type, company
name, and public float, according to Regulation S-T and the EDGAR
Filer Manual).
---------------------------------------------------------------------------

    In the FAST Act Report, the staff recommended that the Commission
consider requiring operating company registrants to tag in XBRL all the
data points on the cover pages of Form 10-K, Form 10-Q, Form 8-K, Form
20-F, and Form 40-F. The staff also recommended that the Commission
consider revising the cover page of these forms to include the trading
symbol for each class of securities registered under the Exchange Act
and require registrants to format this additional data point in
XBRL.\309\
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    \309\ See FAST Act Report, supra note 2, at Recommendations G.1.
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    We are proposing amendments to require all of the information on
the cover pages of Form 10-K, Form 10-Q, Form 8-K, Form 20-F, and Form
40-F to be tagged in Inline XBRL in accordance with the EDGAR Filer
Manual. Under the proposed amendments, the cover page data would appear
in HTML format with embedded XBRL data. We recently proposed to require
the use of the Inline XBRL format, where XBRL data is embedded into an
HTML document, instead of the traditional XBRL format \310\ for the
submission of operating company financial statements.\311\ We intend
for

the cover page data to be tagged in the same format as this other
information. Therefore, if the Inline XBRL proposal is not adopted, we
are proposing, as an alternative, to require operating company filers
to tag each cover page data point in an XBRL exhibit to the relevant
filing.
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    \310\ In the traditional XBRL format currently required for
financial statements, none of the registrant's XBRL data is embedded
into an HTML document. Instead, an exhibit containing all XBRL data
is filed with the relevant form. Inline XBRL allows filers to embed
XBRL data directly into an HTML document, eliminating the need to
tag a copy of the information in a separate document.
    \311\ See Inline XBRL Filing of Tagged Data, Release No. 33-
10323 (Mar. 1, 2017) [82 FR 14282 (Mar. 17, 2017)] (``Inline XBRL
Proposing Release''). As part of the proposal, we also proposed to
require the use of Inline XBRL format for the submission of mutual
fund risk/return summary information. See also Order Granting
Limited and Conditional Exemption Under Section 36(a) of the
Securities Exchange Act of 1934 from Compliance with Interactive
Data File Exhibit Requirement in Forms 6-K, 8-K, 10-Q, 10-K, 20-F
and 40-F to Facilitate Inline Filing of Tagged Financial Data,
Release No. 34-78041 (Jun. 13, 2016) [81 FR 39741 (June 17, 2016)]
(exercising exemptive authority ``to permit, but not require,
operating companies to use Inline XBRL in their periodic and current
reports under the Exchange Act through March 2020'').
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    To implement the cover page tagging requirements, we propose to add
new Rule 406 to Regulation S-T, new Item 601(b)(104) to Regulation S-K,
new paragraph 104 to the ``Instructions as to Exhibits'' of Form 20-F
and new paragraph B.17 to the ``General Instructions'' of Form 40-F to
require registrants to file with each of the specified forms a ``Cover
Page Interactive Data File.'' Under the proposed amendments,
registrants filing Form 20-F and Form 40-F would be required to tag
cover page data only when those forms are used as annual reports. The
proposed amendments would not apply to Form 20-F and Form 40-F when
used as registration statements. We are also proposing to revise Rule
11 of Regulation S-T to add the term ``Cover Page Interactive Data
File.'' The term would be defined as the machine readable computer code
that presents the information required by Rule 406 of Regulation S-T in
Inline XBRL format.
    We believe that the proposal to require mandatory tagging of all
data points on the cover pages of the specified forms would allow
investors to automate their use of this information. This would enhance
their ability to identify, count, sort, and analyze registrants and
disclosures to the extent these data points otherwise would be
formatted solely in ASCII or HTML. At the same time, we do not expect
the incremental compliance burden associated with tagging the
additional cover page information to be significant, given that
registrants already are required to tag some of this information as
well as information in their financial statements. We therefore believe
that the enhanced comparability and usability of these proposed
disclosures would justify the burden of requiring registrants to tag
the additional data and would help to modernize our disclosure system
in a manner consistent with the FAST Act mandate.
    We are also proposing amendments to the cover pages of these forms
to include the trading symbol for each class of registered
securities.\312\ Because the cover pages of Form 10-K, Form 20-F, and
Form 40-F already require disclosure of the title of each class of
securities registered pursuant to Section 12(b) of the Exchange Act and
each exchange on which they are registered, our proposed amendments to
these forms would revise the cover page to include a corresponding
field for the trading symbol. Unlike Form 10-K, Form 20-F, and Form 40-
F, however, the cover pages of Form 10-Q and Form 8-K do not currently
require disclosure of the title of each class of securities and each
exchange on which they are registered. Accordingly, to ensure that
registrants and their registered securities are identified in a
consistent manner across forms, we are proposing to revise the cover
pages of Form 10-Q and Form 8-K to include this disclosure in addition
to the trading symbol.
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    \312\ In the Disclosure Update and Simplification Proposing
Release, we have proposed to amend Item 201(a) to also require
disclosure of the trading symbol(s) for each class of a registrant's
common equity. See Disclosure Update and Simplification Proposing
Release, supra note 13, at 51637.
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    Requiring the disclosure of trading symbols on the cover pages of
periodic reports would facilitate investors' efforts to search news
websites and stock market databases for information about registrants
and distinguish among similarly named companies. Further, we believe
that requiring the tagging of trading symbols would allow investors to
sort and compare filings and disclosures more easily and accurately.
Request for Comment
    86. Should we require as proposed, all of the information on the
cover pages of Form 10-K, Form 10-Q, Form 8-K, Form 20-F, and Form 40-F
to be tagged in Inline XBRL? Should the proposed cover page tagging
requirement apply to any other forms (e.g., Form 6-K)?
    87. Should we amend the cover pages of Form 10-K, Form 20-F, and
Form 40-F to include the trading symbol for each class of registered
securities as proposed? Should we also revise the cover pages of Form
10-Q and Form 8-K as proposed, to include the title, trading symbol and
exchange of each class of registered securities?
    88. Under the proposed amendments, Form 10-K, Form 10-Q, Form 8-K,
Form 20-F, and Form 40-F would require each registrant to identify on
the cover page of those forms the exchange on which each class of
securities is registered. The proposed amendments to Item 501(b)(4)
would require each registrant to identify on the cover page of the
prospectus its principal U.S. market or markets for the securities
being offered. Should we reconcile these differing cover page
disclosures? If so, how?
    89. If we do not adopt Inline XBRL for the submission of operating
company financial statements, should we instead require the cover page
data to be tagged using traditional XBRL format?
    90. Instead of requiring the cover page data to be tagged using
Inline XBRL or traditional XBRL format, should we require the cover
page data to be submitted using an XML format? Why or why not?
    91. Are there any changes we should make to the proposed amendments
to better ensure accurate and consistent tagging? If so, which changes
should we make and why?
    92. Are there any disclosures discussed in this release that we
should require to be provided in a structured format? For example,
should we require the use of structured data within Item 303(a) to
facilitate readability and navigability of this disclosure for
investors? Are there specific elements of Item 303(a) disclosure, such
as the table of contractual obligations, which should be provided in a
machine-readable structured data format? Would it be useful to
investors to require registrants to provide any of the property
disclosures under Item 102 in a machine-readable format, such as
geospatial coordinates? To the extent that we consider additional
structured data requirements in periodic reports, what level and type
of structured data requirements would be appropriate? For example,
should we require registrants to identify sections, subsections or
topics with ``block text'' labels, or should we require registrants to
structure numeric elements and tables individually? What would be the
challenges and costs of such an approach? What would be the benefits?
2. Exhibit Hyperlinks and HTML Format for Investment Companies
    As discussed above, the Commission recently adopted rules requiring
hyperlinks to most exhibits filed pursuant to Item 601, Form F-10, and
Form 20-F, and, to accommodate hyperlinks, those filings will be
required to be made in HTML.\313\ In this release, we are proposing
parallel amendments to certain of our forms that are used by investment
companies and amendments to Rule 102 \314\ of Regulation S-T to apply
similar hyperlinking and HTML requirements to those registrants to
facilitate access to these exhibits for investors and other users of
the information.
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    \313\ See Exhibit Hyperlinks Adopting Release, supra note 14 at
14130.
    \314\ 17 CFR 232.102.

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    Under the proposed amendments, affected registrants would be
required to include a hyperlink to each exhibit identified in a
filing's exhibit index, unless the exhibit is filed in paper pursuant
to a temporary or continuing hardship exemption under Rule 201 or Rule
202 of Regulation S[dash]T, or pursuant to Rule 311 of Regulation S-
T.\315\ This requirement would apply to registration statements on Form
S-6, Form N-1A, Form N-2, Form N-3, Form N-4, Form N-5, Form N-6, and
Form N-14 and to reports on Form N-CSR.\316\ Consistent with our rules
for operating companies, we are not proposing to require registrants to
refile electronically any exhibits filed only in paper.\317\ Under the
proposed amendments, an electronic filer would also be required to
correct an inaccurate or nonfunctioning link or hyperlink to an
exhibit.\318\
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    \315\ As with the rules for operating companies, the proposed
rules for investment companies would exclude any XBRL exhibits. See
id. at 14133.
    \316\ See proposed Instructions as to Exhibits of Form S-6;
proposed Instruction to Item 28 of Form N-1A; proposed Instruction 4
to Item 25.2 of Form N-2; proposed Instruction 3 to Item 29(b) of
Form N-3; proposed Instruction 3 to Item 24(b) of Form N-4; proposed
Instructions as to Exhibits of Form N-5; proposed Item 26 of Form N-
6; proposed Instruction to Item 16 of Form N-14; proposed
Instruction to Item 12 of Form N-CSR. We are also proposing to amend
Forms N-3 and N-14 to clarify that Rule 303 of Regulation S-T
applies to registration statements on Forms N-3 and N-14 that are
electronically filed. See proposed General Instruction G to Form N-
3; proposed Instruction to Item 16 of Form N-14.
    \317\ See Exhibit Hyperlinks Adopting Release, supra note 14, at
14133.
    \318\ 17 CFR 232.105(d)(2). In the case of a registration
statement that is not yet effective, the filer would be required to
file an amendment to the registration statement containing the
inaccurate or nonfunctioning link or hyperlink. In the case of a
report on Form N-CSR, the filer would be required to correct the
inaccurate or nonfunctioning link or hyperlink in its next report on
Form N-CSR. In the case of a registration statement on Form S-6,
Form N-14, Form N-5, Form N-1A, Form N-2, Form N-3, Form N-4, or
Form N-6 that has become effective, the filer would be required to
correct an inaccurate or nonfunctioning link or hyperlink in the
next post-effective amendment, if any, to the registration
statement. Alternatively, an electronic filer may correct an
inaccurate or nonfunctioning link or hyperlink in a registration
statement that has become effective by filing a post-effective
amendment to the registration statement. Id.
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    In connection with the proposed exhibit hyperlinking requirements,
we are also proposing amendments to Rule 105 of Regulation S[dash]T to
require investment company registrants to file registration statements
and reports that include exhibits in HTML format. Currently, investment
company registrants must submit electronic filings to the Commission
using the EDGAR system in either ASCII format or HTML format. Because
the ASCII format does not support hyperlink functionality, the exhibit
hyperlinking requirement would be feasible only if registrants are
required to file in HTML. Under the proposed requirement, registrants
would be required to file registration statements and reports on Form
S-6,\319\ Form N-1A,\320\ Form N-2,\321\ Form N-3,\322\ Form N-4,\323\
Form N-5,\324\ Form N-6,\325\ Form N-14, and Form N-CSR \326\ in HTML
format. While the affected registration statements and reports would be
required to be filed in HTML pursuant to the proposed amendments to
Rule 105, registrants would continue to be permitted to file in ASCII
any schedules or forms that are not subject to the exhibit filing
requirements, such as proxy statements, or other documents included
with a filing, such as an exhibit.
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    \319\ 17 CFR 239.16.
    \320\ 17 CFR 239.15A and 17 CFR 274.11A.
    \321\ 17 CFR 239.14 and 17 CFR 274.11a-1.
    \322\ 17 CFR 239.17a and 17 CFR 274.11b.
    \323\ 17 CFR 239.17b and 17 CFR 274.11c.
    \324\ 17 CFR 239.24 and 17 CFR 274.5.
    \325\ 17 CFR 239.17c and 17 CFR 274.11d.
    \326\ 17 CFR 249.331 and 17 CFR 274.128.
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Request for Comment
    93. Should we require investment company registrants to include
hyperlinks in the exhibit index for registration statements and reports
as proposed? Should we amend Rule 105 of Regulation S[dash]T to require
investment company registrants to file registration statements and
reports that include exhibits in HTML format as proposed?
    94. Should we revise any additional forms to require exhibit
hyperlinks? For example, should we revise a form to require exhibit
hyperlinks even though all exhibits filed with this form will be
attached to it?
    95. Should we require, as proposed, that electronic filers correct
an inaccurate or nonfunctioning link or hyperlink? If so, when should
the correction be required to be filed?
    96. Should we require registrants to refile electronically any
exhibit previously filed in paper so that they can include a hyperlink
in the exhibit index?
    97. What compliance date would be appropriate for investment
companies to begin filing in HTML format? Should the compliance date be
the same for all affected investment companies, or should we
distinguish between larger and smaller investment companies, for
example, by providing an extended compliance date for smaller entities?
If we provide an extended compliance date for smaller entities, what
additional compliance period would be necessary and how should we
define those smaller entities? For example, should we define smaller
investment companies for these purposes as investment companies that,
together with other investment companies in the same group of related
investment companies have net assets of less than $1 billion as of the
end of the most recent fiscal year of the investment company?

H. General Request for Comment

    We request and encourage any interested person to submit comments
regarding the proposed amendments, specific issues discussed in this
release and other matters that may have an effect on the proposals. We
note that comments that are accompanied by supporting data and analysis
are of particular assistance to us.

III. Economic Analysis

    We are mindful of the costs and benefits of our rules. Section 2(b)
of the Securities Act, Section 3(f) of the Exchange Act, Section 2(c)
of the Investment Company Act, and Section 202(c) of the Investment
Advisers 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.\327\ Additionally, Exchange Act Section 23(a)(2)
requires us, when adopting rules under the Exchange Act, to consider,
among other things, the impact that any new rule would have on
competition and not to adopt any rule that would impose a burden on
competition that is not necessary or appropriate in furtherance of the
Exchange Act.\328\
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    \327\ 15 U.S.C. 77b(b), 15 U.S.C. 78c(f), 15 U.S.C. 80a-2(c),
and 15 U.S.C. 80b-2(c).
    \328\ 15 U.S.C. 78w(a)(2).
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    In this release, we are proposing amendments to simplify and
modernize disclosure requirements in Regulation S-K and related rules
and forms as required by Section 72003 of the FAST Act.\329\ The
proposed amendments are based on the staff's recommendations in the
FAST Act Report. The FAST Act Report was tailored to the statutory
mandate of providing specific and detailed recommendations on
modernizing and simplifying Regulation S-K in a manner that reduces
costs and burdens on registrants while still providing all material
information. As discussed above, the proposed amendments reflect the
input of public commenters as well as the Commission's experience with

Regulation S-K arising from the Division of Corporation Finance's
disclosure review program. To promote consistency, we are also
proposing parallel amendments to certain rules and forms applicable to
investment companies and investment advisers, including proposed
amendments that would require certain investment company filings to be
submitted in HTML format.
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    \329\ Public Law 114-94, Sec. 72003, 129 Stat. 1312 (2015).
---------------------------------------------------------------------------

A. Background

1. The Benefits of Information Disclosure
    The primary purpose of disclosure under the federal securities laws
is to provide investors with the information they need to make informed
investment and voting decisions. The separation of ownership and
management typically prevents investors from directly observing many
managerial decisions and requires them to rely on financial and
qualitative disclosures for information. Absent regulation, managers
may lack incentives to voluntarily disclose or standardize relevant
information. As a result, in the absence of disclosure requirements, an
information asymmetry often exists between managers and investors that
limits the ability of investors to distinguish between well-run and
poorly-run companies and can lead to under-supply and inefficient
allocation of capital.\330\ A disclosure regime that facilitates the
disclosure of material, reliable information can reduce informational