[Federal Register Volume 81, Number 176 (Monday, September 12, 2016)]
[Proposed Rules]
[Pages 62689-62700]
[FR Doc No: 2016-21313]

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SECURITIES AND EXCHANGE COMMISSION

17 CFR Parts 229, 232, 239 and 249

[Release Nos. 33-10201; 34-78737; File No. S7-19-16]
RIN 3235-AL95

Exhibit Hyperlinks and HTML Format

AGENCY: Securities and Exchange Commission.

ACTION: Proposed rule.

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SUMMARY: We are proposing amendments that would require registrants
that file registration statements and periodic and current reports that
are subject to the exhibit requirements under Item 601 of Regulation S-
K, or that file on Forms F-10 or 20-F, to include a hyperlink to each
exhibit listed in the exhibit index of these filings. To enable the
inclusion of such hyperlinks, the proposed amendments would also
require that registrants submit all such filings in HyperText Markup
Language (``HTML'') format.

DATES: Comments should be received on or before October 27, 2016.

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

Electronic Comments

     Use the Commission's Internet comment form (http://www.sec.gov/rules/proposed.shtml); or
     Send an email to<EMAIL_ADDRESS>Please include
File Number S7-19-16 on the subject line; or
     Use the Federal eRulemaking Portal (http://www.regulations.gov). Follow the instructions for submitting comments.

Paper Comments

     Send paper comments to Brent J. Fields, Secretary,
Securities and Exchange Commission, 100 F Street NE., Washington, DC
20549-1090.

All submissions should refer to File Number S7-19-16. This file number
should be included on the subject line if email is used. To help us
process and review your comments more efficiently, please use only one
method. The Commission will post all comments on the Commission's
Internet Web site (http://www.sec.gov/rules/proposed.shtml). Comments
are also available for Web site viewing and printing in the
Commission's Public Reference Room, 100 F Street NE., Washington, DC
20549, on official business days between the hours of 10:00 a.m. and
3:00 p.m. All comments received will be posted without change; we do
not edit personal identifying information from submissions. You should
submit only information that you wish to make available publicly.
    Studies, memoranda or other substantive items may be added by the
Commission or staff to the comment file during this rulemaking. A
notification of the inclusion in the comment file of any such materials
will be made available on the SEC's Web site. To ensure direct
electronic receipt of such notifications, sign up through the ``Stay
Connected'' option at www.sec.gov to receive notifications by email.

FOR FURTHER INFORMATION CONTACT: N. Sean Harrison, Special Counsel, at
(202) 551-3430, in the Office of Rulemaking, Division of Corporation
Finance, U.S. Securities and Exchange Commission, 100 F Street NE.,
Washington, DC 20549.

SUPPLEMENTARY INFORMATION: We are proposing amendments to Item 601 of
Regulation S-K,\1\ Forms 20-F \2\ and F-10,\3\ and Rules 11,\4\ 102 \5\
and 105 \6\ of Regulation S-T.\7\
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    \1\ 17 CFR 229.601.
    \2\ 17 CFR 249.20f.
    \3\ 17 CFR 239.40.
    \4\ 17 CFR 232.11.
    \5\ 17 CFR 232.102.
    \6\ 17 CFR 232.105.
    \7\ 17 CFR 232.10 et seq.
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I. Introduction

    Since the Commission's implementation of the Electronic Data
Gathering, Analysis, and Retrieval system (``EDGAR'') in 1984 to
automate the receipt, processing, and dissemination of documents
required to be filed under the federal securities laws,\8\ we have
sought to make EDGAR more efficient and comprehensive. For example, in
2000, we adopted rule and form amendments in connection with the
modernization of EDGAR that allowed registrants to file EDGAR documents
in the HTML format.\9\ In addition, we expanded the permissible use of
hyperlinks in EDGAR filings to allow filers to hyperlink to other
documents within the same filing and to hyperlink to documents
contained in other filings in the EDGAR database. Recently, we issued a
concept release examining the business and financial information
Regulation S-K requires registrants to disclose, how this information
is presented, where and how this information is disclosed and how we
can leverage technology as part of these efforts.\10\ The S-K Concept
Release was a product of the staff's work on the Disclosure
Effectiveness Initiative, which is part of a comprehensive evaluation
of the Commission's disclosure requirements recommended in the staff's
Report on Review of Disclosure Requirements in Regulation S-K (``S-K
Study'').\11\ In furtherance of the objectives of the Disclosure
Effectiveness Initiative, we are proposing rule amendments to Item

601 of Regulation S-K and Rules 102 \12\ and 105 of Regulation S-T to
require registrants to include a hyperlink to each exhibit identified
in the exhibit index in any registration statement or report that is
required to include exhibits under Item 601.\13\ In addition, because
the text-based American Standard Code for Information Interchange
(``ASCII'') format cannot support functional hyperlinks, we are
proposing to require registrants filing such registration statements or
reports to file these forms on EDGAR in HTML. We discuss these proposed
amendments in more detail below.
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    \8\ See Electronic Filing, Processing and Information
Dissemination System, Release No. 33-6519 (Mar. 30, 1984) [49 FR
12707].
    \9\ See Rulemaking for EDGAR System, Release No. 33-7855 (Apr.
24, 2000) [65 FR 24788]. Filers also may submit unofficial copies of
filings in Portable Document Format (``PDF''). See Rule 104 of
Regulation S-T [17 CFR 232.104].
    \10\ See Business and Financial Disclosure Required by
Regulation S-K, Release No. 33-10064 (Apr. 13, 2016) [81 FR 23916]
(``S-K Concept Release''). The Division of Corporation Finance is
reviewing the disclosure requirements in Regulation S-K [17 CFR 229
et seq.] and Regulation S-X [17 CFR 210 et seq.], and is considering
ways to improve the disclosure regime for the benefit of both public
companies and investors.
    \11\ The S-K Study was mandated by Section 108 of the Jumpstart
Our Business Startups Act. See Public Law 112-106, Sec. 108, 126
Stat. 306 (2012).
    \12\ Rule 102 of Regulation S-T sets forth requirements for
exhibits included in electronic filings.
    \13\ The proposed amendments exclude exhibits filed with Form
ABS-EE [17 CFR 249.1401] and any eXtensive Business Reporting
language (``XBRL'') exhibits. See futher discussion below.
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II. Discussion of the Proposed Amendments

    Item 601 of Regulation S-K specifies the exhibits that registrants
must file with registration statements filed under the Securities Act
of 1933 (``Securities Act'') \14\ and Securities Exchange Act of 1934
(``Exchange Act'') \15\ and with periodic and current reports under the
Exchange Act, which we will refer to collectively in this release as
the ``registration statements and reports.'' Item 601 also requires
registrants to include an exhibit index that lists each exhibit
included with the filing.\16\ Once an exhibit is filed, registrants can
incorporate it by reference to meet the exhibit requirements in
subsequent filings to the extent permitted by our rules or the
applicable disclosure form.\17\
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    \14\ 15 U.S.C. 77a et seq.
    \15\ 15 U.S.C. 78a et seq.
    \16\ See Item 601(a)(2) of Regulation S-K [17 CFR
229.601(a)(2)], Rule 102 of Regulation S-T [17 CFR 232.102] and
Exchange Act Rule 0-3(c) [17 CFR 240.0-3(c)].
    \17\ See, e.g., Item 10(d) of Regulation S-K [17 CFR 229.10(d)].
Item 10(d) provides, with certain exceptions, that where rules,
regulations, or instructions to forms of the Commission permit
incorporation by reference, a document may be so incorporated by
reference to the specific document and to the prior filing or
submission in which such document was physically filed or submitted.
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    Currently, filers must submit electronic filings to the Commission
using the EDGAR system in either the ASCII format or the HTML format.
HTML has features that allow electronic documents prepared in this
format to include hyperlinks that link to another place within the same
document or to a separate document. A document filed in ASCII format
can include a cross-reference, but it cannot support a functional
hyperlink. Since the time we updated the EDGAR system to accept HTML
formatted documents, HTML has become the predominant format used by
registrants. During 2015, over 99% of the filings that were made on the
forms that would be affected by the proposed amendments were filed in
HTML.\18\
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    \18\ During the 2015 calendar year, over 114,000 of these forms
were filed on EDGAR. Approximately 845 of those filings were
submitted in the ASCII format.
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    Under the current system, someone seeking to retrieve and access an
exhibit that has been incorporated by reference must review the exhibit
index to determine the filing in which the exhibit is included, and
then must search through the registrant's filings to locate the
relevant filing to review for the particular exhibit. This process can
be both time consuming and cumbersome. We believe that requiring
registrants to include hyperlinks from the exhibit index to the actual
exhibits filed would facilitate easier access to these exhibits for
investors and other users of the information.
    Rule 105 of Regulation S-T sets forth the limitations on, and
liability for, the use of HTML documents and hyperlinks in EDGAR
filings. Rule 105, among other things, currently permits hyperlinking
to other documents within the same filing, such as exhibits, and to
documents contained in other forms or schedules that have been
previously filed on EDGAR. Rule 105 prohibits hyperlinking to sites,
locations or documents outside of the EDGAR system.
    We are proposing to amend Item 601 of Regulation S-K and Rules 11,
102 \19\ and 105 of Regulation S-T to require registrants to include a
hyperlink to each filed exhibit as identified in the exhibit index,
unless the exhibit is filed in paper pursuant to a temporary or
continuing hardship exemption under Rules 201 or 202 of Regulation S-T
or pursuant to Rule 311 of Regulation S-T.\20\ The proposed amendments
would apply to nearly all of the forms that are required to include
exhibits under Item 601,\21\ specifically Forms S-1,\22\ S-3,\23\ S-
4,\24\ S-8,\25\ S-11,\26\ F-1,\27\ F-3,\28\ F-4,\29\ SF-1,\30\ and SF-3
\31\ under the Securities Act; and Forms 10,\32\ 10-K,\33\ 10-Q, 8-
K,\34\ and 10-D \35\ under the Exchange Act. In addition, we are
proposing corresponding amendments to Form F-10 and Form 20-F.
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    \19\ Rule 102 of Regulation S-T requires each exhibit to an
electronic filing to be filed electronically unless there is an
applicable exemption.
    \20\ 17 CFR 232.201, 232.202 and 232.311.
    \21\ The proposed amendments exclude Form ABS-EE, see footnote
13 above. Although the disclosure forms used by registered
investment companies would not be covered by the proposed
amendments, some investment companies file annual reports on Form
10-K. Those investment companies would be subject to the proposed
amendments. The staff will consider whether the proposals discussed
in this release should be extended to a broader group of registrants
or additional form types. Any future rulemaking proposals that may
stem from the staff's consideration would be subject to notice and
public comment.
    \22\ 17 CFR 239.11.
    \23\ 17 CFR 239.13.
    \24\ 17 CFR 239.25.
    \25\ 17 CFR 239.16b.
    \26\ 17 CFR 239.18.
    \27\ 17 CFR 239.31.
    \28\ 17 CFR 239.33.
    \29\ 17 CFR 239.34.
    \30\ 17 CFR 239.44.
    \31\ 17 CFR 239.45.
    \32\ 17 CFR 249.210.
    \33\ 17 CFR 249.310.
    \34\ 17 CFR 249.308.
    \35\ 17 CFR 249.312.
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    The proposed amendments exclude the exhibits filed with Form ABS-EE
because the form is used solely to facilitate the filing of tagged data
and related information that must be filed as exhibits to the form.
Form ABS-EE does not permit exhibits to be incorporated by reference
and the exhibits are in unconverted code. Therefore, we believe it is
not necessary to require that Form ABS-EE include hyperlinks to the
exhibits that must be filed with the form. The proposed amendments also
exclude any XBRL exhibits that are filed with the affected forms
because the XBRL exhibits similarly are in unconverted code and not
incorporated by reference into other filings.\36\
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    \36\ The Commission has recently announced a time-limited
program to permit registrants to voluntarily file structured
financial statement data using Inline XBRL. Inline XBRL will allow
registrants to file the required information and data tags in one
document rather than requiring a separate exhibit for the
interactive data, and may help inform future Commission rulemaking
in this area. 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 (June 13, 2016) [81 FR 39741].
The amendments we are proposing in this release and the Inline XBRL
program are part of the Commission's continuing efforts and interest
in modernizing the format of the information filed on EDGAR to make
it more accessible to investors and other users.

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    Under the proposed amendments, a registrant would be required to
include an active hyperlink to each exhibit identified in the exhibit
index of the filing. If the filing is a periodic or current report
under the Exchange Act, a registrant would be required to include an
active hyperlink to each exhibit listed in the exhibit index when the
report is filed. If the filing is a registration statement, the
registrant would only be required to include an active hyperlink to
each exhibit in the version of the registration statement that becomes
effective.\37\ We preliminary believe that this would ensure that the
most complete exhibit index is hyperlinked and located in one primary
document.
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    \37\ Similarly, for a registration statement, or post-effective
amendment to a registration statement, that becomes effective upon
filing with the Commission, an active hyperlink to each exhibit
listed in the exhibit index of such registration statement or post-
effective amendment would be required at the time of filing. See
proposed amendments to Rule 105 of Regulation S-T.
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    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. We are therefore proposing
that all registrants be required to file the forms affected by the
proposals in HTML format.\38\
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    \38\ We are also considering ways to further enhance the
presentation and usability of the exhibit index. HTML tags
identifying the exhibit index would make it possible to include a
hyperlink to the exhibit index on a registrant's search results
EDGAR landing page. This could allow investors and other users to
more easily access the exhibits.
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    We also propose to revise Item 601(a)(2) to remove obsolete
language from the item relating to paper filings.
Request for Comment
    1. Should we require registrants to include hyperlinks from the
exhibit index to the exhibits identified in the index for the
registration statements and reports, as proposed?
    2. Should we exclude the Form ABS-EE exhibits and the XBRL exhibits
that are filed with other forms as proposed? What would be the costs
and benefits to requiring registrants to hyperlink to such exhibits?
    3. Registrants often file multiple pre-effective amendments before
a registration statement becomes effective. Each pre-effective
amendment may include one or more exhibits that the registrant has not
filed previously. For example, when a registrant first files a Form S-
1, the registrant will list the exhibits and indicate by asterisk and
footnote those that will be filed in future amendments. By the time the
registration statement becomes effective, the registrant typically has
filed most or all of the exhibits in previous amendments. Should we
require registrants to include hyperlinks to the exhibits filed with
the initial registration statement and each pre-effective amendment?
Should we require registrants to include hyperlinks from the exhibit
index to the exhibits included in each pre-effective amendment to all
of the exhibits filed with each such amendment, as well as previously
filed exhibits to the registration statement? Should we require that
active hyperlinks be included in other pre-effective registration
statements, such as those that include a preliminary prospectus
distributed in connection with an offer, often known as a red herring
prospectus?
    4. Should we revise Form 6-K filed by foreign private issuers and/
or other MJDS forms, such as Forms F-7, F-8, and F-80, to require
exhibit hyperlinks even though all exhibits filed with these forms will
be attached to them?
    5. Are there any particular difficulties in requiring registrants
to provide hyperlinks to the exhibits identified in Item 601 of
Regulation S-K that are filed with a registration statement or report
as proposed?
    6. Our rules currently do not require a registrant that filed an
exhibit in paper prior to the time that it became subject to mandated
electronic filing on EDGAR to refile the exhibit in electronic format,
although the registrant has the option to do so.\39\ Our rules permit a
registrant to incorporate by reference an exhibit previously filed in
paper into electronic filings. Accordingly, there may be some instances
in which a registrant incorporates by reference an exhibit previously
filed in paper, such as its articles of incorporation, into a Form 10-K
or other form, but cannot include a hyperlink to that paper-based
exhibit. Accordingly, a proposed instruction to amended Rule 105 of
Regulation S-T would provide that no hyperlink is required for any
exhibit incorporated by reference that has not been filed in electronic
format. Should we require registrants to refile electronically any
exhibit previously filed in paper so that they can include a hyperlink
from the exhibit index to the exhibit? If so, how long should
registrants be given to refile such exhibits? Are there alternatives
that we should consider to address this situation?
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    \39\ See Rule 102(a) of Regulation S-T. Rule 102(a) states an
electronic filer may, at its option, restate in electronic format an
exhibit it incorporated by reference that was originally filed in
paper format.
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    7. Would smaller reporting companies and non-accelerated filers
that currently file in ASCII face any specific difficulties or incur
any unreasonable costs in converting their filings to HTML format? If
so, should we keep the ASCII format as an EDGAR filing option for these
filers? \40\
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    \40\ We estimate that in calendar year 2015, 175 registrants
filed a registration statement or report in ASCII. Approximately 74%
of these ASCII filings were filed by smaller reporting companies or
non-accelerated filers.
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    8. Are there more effective ways to improve access to documents
filed as exhibits by registrants that we should consider? As an
alternative to the proposed amendments, should we require registrants
to file and update a compilation of exhibits separately from the Form
10-K or other forms? If so, which exhibits should be included in the
compilation and how frequently should registrants have to update them?
Should we revise the exhibit numbering scheme to help investors more
readily identify exhibits? Would a more detailed numbering or
identification system improve investors' access to the information
filed as exhibits?

III. Economic Analysis

    As discussed above, we are proposing amendments that would require
registrants that file registration statements and reports that are
subject to the exhibit requirements under Item 601 of Regulation S-K,
or that file on Forms F-10 or 20-F, to include a hyperlink to each
exhibit identified in the exhibit index of these filings and to submit
all such filings in HTML format.\41\ We are sensitive to the costs and
benefits of the proposed amendments. In this economic analysis, we
examine the existing baseline, which consists of the current regulatory
framework and market practices, and discuss the potential benefits and
costs of the proposed amendments, relative to this baseline, and their
potential effects on efficiency, competition, and capital
formation.\42\ We also consider the potential costs and benefits of
reasonable alternatives to the proposed amendments.
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    \41\ As indicated in note 13 above, the proposed amendments
exclude Form ABS-EE.
    \42\ Exchange Act Section 23(a)(2) [15 U.S.C. 78w(a)] requires
us, when adopting rules, to consider the impact that any new rule
would have on competition. In addition, Section 2(b) of the
Securities Act [15 U.S.C. 77b(b)] and Section 3(f) of the Exchange
Act [15 U.S.C. 78c(f)] direct us, when engaging in rulemaking that
requires us to consider or determine whether an action is necessary
or appropriate in the public interest, to consider, in addition to
the protection of investors, whether the action will promote
efficiency, competition, and capital formation.

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    Where practicable, we attempt to quantify the economic effects of
the proposed amendments; however, in certain cases, we are unable to do
so because we lack the necessary data. We do, however, provide a
qualitative assessment of the likely economic effects. We request
comment on all aspects of the economic effects, including the costs and
benefits of the proposals and possible alternatives to the proposed
amendments. We particularly welcome comments that include data or
qualitative information that would enable us to quantify the costs and
benefits associated with the proposals and alternative implementations
of the proposed amendments.

A. Baseline

    The proposed amendments would affect all registrants that file
registration statements and reports that are required to include
exhibits under Item 601 of Regulation S-K, specifically Forms S-1, S-3,
S-4, S-8, S-11, SF-1, SF-3, F-1, F-3, and F-4 under the Securities Act
and Forms 10, 10-K, 10-Q, 8-K, and 10-D under the Exchange Act. In
addition, the proposed amendments would affect Forms F-10 and 20-F.
Although registrants that currently file registration statements and
reports in HTML format would not be affected by the requirement to file
in HTML format, they would be required to include hyperlinks from the
exhibits identified in the exhibit index to the actual exhibits that
are filed with the document or that were previously filed with another
document. Because the ASCII format does not support hyperlink
capabilities, registrants that currently file these forms and reports
in ASCII format would be required to file in HTML in addition to
complying with the proposed exhibit hyperlink requirement.
    We estimate that, in calendar year 2015, 9,589 registrants filed
either a registration statement or a report in HTML, while 175
registrants made filings in ASCII. Table 1 below shows the number of
registration statements and reports that registrants filed with the
Commission in calendar year 2015. Table 1 also presents the number of
filings submitted in HTML format and ASCII format, respectively,
excluding amendments. Because hyperlinking is not available in ASCII
format, we present the baseline analysis of filings separately for HTML
and ASCII formats.

  Table 1--Number of Registration Statements and Reports Filed in 2015
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                                                     Number of filings
   Securities Act registration statements and     (excluding amendments)
               Exchange Act forms                -----------------------
                                                     HTML        ASCII
------------------------------------------------------------------------
Form S-1........................................         849           9
Form S-3........................................         700           9
Form S-4........................................         349           0
Form S-8........................................       2,135           6
Form S-11.......................................          37           0
Form SF-1.......................................           0           0
Form SF-3.......................................          48           0
Form F-1........................................          79           0
Form F-3........................................          69           0
Form F-4........................................          24           0
Form F-10.......................................          41           0
Form 10 \43\....................................         118          19
Form 20-F.......................................         685           0
Form 10-K.......................................       7,596          63
Form 10-Q.......................................      21,474         162
Form 8-K \44\...................................      74,041         366
Form 10-D.......................................       5,393         211
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    As shown in Table 1, among the types of forms affected by the
proposed amendments, Forms S-1, S-8, 10-K, 10-Q, 10-D, and 8-K were the
most frequently filed in HTML format in 2015. As a proxy for
registrants' size, we used the filer status that registrants reported
in their Form 10-K in calendar year 2015. We found that 32% of the
registration statements and reports (excluding amendments) filed in
HTML format were filed by large accelerated filers, 20% by accelerated
filers and 44% by smaller reporting companies or non-accelerated
filers.\45\ In calendar year 2015, on average, large accelerated filers
filed more registration statements and reports in HTML format (16.5)
than accelerated filers (14.9) or smaller reporting companies and non-
accelerated filers (9.7).
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    \43\ The number of Form 10s includes Forms 10-12B and 10-12G.
    \44\ The number of Form 8-Ks also includes Form 8-K12Bs.
    \45\ The remaining 4% of 2015 filings in HTML format were filed
by registrants whose filer status was not indicated.
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    In calendar year 2015, a limited set of form types were filed in
ASCII format. In particular, Forms 8-K, 10-D, 10-Q and 10-K were the
form types that were most frequently filed in ASCII format. We found
that only 4% of the registration statements and reports (excluding
amendments) filed in ASCII were filed by large accelerated filers; 3%
by accelerated filers; and 74% by smaller reporting companies or non-
accelerated filers.\46\ As in the case of filings in HTML format, in
calendar year 2015, on average, large accelerated filers more
registration statements and reports in ASCII format (7.4) than
accelerated filers (6.8) or smaller reporting companies and non-
accelerated filers (5.6).
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    \46\ The remaining 19% of 2015 filings in ASCII format were
filed by registrants whose filer status was not indicated.
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i. HTML Filers
    To draw a baseline indicative of the current disclosure practices
by HTML filers, we selected a random sample of 570 filings from 2015
registration statements and reports (excluding amended filings). This
sample included 150 randomly selected Form 10-K filings and 420
randomly selected other filings in HTML format.
    The proposed amendments would require registrants to include
hyperlinks for all exhibits listed in the exhibit index, whether
included with the filing or incorporated by reference from a previously
filed document. Table 2 below shows the average and median number of
exhibits \47\ listed in the random sample of 570 filings by the type of
forms affected by the proposed amendments.
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    \47\ In counting the number of exhibits, we did not include
exhibits filed by pre-effective amendment because they would not be
affected by the proposed amendments as only the version of a
registration statement that becomes effective would require
hyperlinks. Moreover, we did not include the following exhibits:
101.INS XBRL Instance Taxonomy; 101.SCH XBRL Taxonomy Extension
Schema Document; 101.CAL XBRL Taxonomy Extension Calculation
Linkbase Document; 101.DEF XBRL Taxonomy Extension Definition
Linkbase Document; 101.LAB XBRL Taxonomy Extension Labels Linkbase
Document; and 101.PRE XBRL Taxonomy Extension Presentation Linkbase
Document because XBRL exhibits are not covered by the proposal.

                                                               Table 2--Number of Exhibits
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                                           Number of exhibits listed  in  Number of exhibits filed  with        Number of exhibits
                                                     the index                       the form                incorporated by reference       Number of
                                         ------------------------------------------------------------------------------------------------     sampled
                                           Average \48\     Median \49\       Average         Median          Average         Median          filings
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Form S-1................................            29.8            21.0             8.3             4.5            21.5             5.5              36

Form S-3................................            10.1             8.0             4.7             4.0             5.4             4.0              42
Form S-4................................            30.7            15.0             9.1             6.5            21.6             7.5              32
Form S-8................................             5.4             4.0             2.1             2.0             3.3             2.5              48
Form S-11...............................            15.3            11.0             7.6             2.5             7.7             0.0              12
Form SF-1...............................  ..............  ..............  ..............  ..............  ..............  ..............               0
Form SF-3...............................             9.3             7.0             4.6             2.5             4.7             2.0              20
Form F-1................................            16.9            16.0            15.7            12.0             1.2             0.0              15
Form F-3................................             7.0             6.0             4.1             4.0             2.9             2.5              22
Form F-4................................            20.1            12.0            14.4            10.0             5.7             0.5              14
Form F-10...............................            12.2            11.0            4.75             3.0            7.45             7.0              20
Form 10.................................             5.2             2.0             4.6             2.0             0.6             0.0              23
Form 20-F...............................            28.2            24.0             5.3             7.0            22.9            17.0              25
Form 10-K...............................            38.9            33.5             7.4             7.0            31.5            25.0             150
Form 10-Q...............................             6.4             4.0             4.1             4.0             2.3             0.0              34
Form 8-K................................             1.7             1.0             1.1             1.0             0.6             0.0              49
Form 10-D...............................             0.0             0.0             0.0             0.0             0.0             0.0              28
All Forms...............................            19.5            10.0             5.7             4.0            13.8             3.0             570
Forms S-1, S-4, S-11, F-1, F-4, F-10, 20-           32.8            25.0             8.3             7.0            24.5            16.0             304
 F and 10-K.............................
Other Forms & Reports...................             5.4             4.0             2.9             2.0             2.5             0.0             266
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    Table 2 shows a significant variation in the number of exhibits
listed in the exhibit index across different types of forms. Among the
Securities Act registration statements, Forms S-1, S-4, S-11, F-1, F-4
and F-10 typically contain a large number of exhibits, while among the
Exchange Act reports, Forms 20-F and 10-K contain significantly more
exhibits than other form types. Overall, Forms S-1, S-4, S-11, F-1, F-
4, F-10, 20-F and 10-K had a median number of 25 exhibits, compared to
a median of four exhibits in the other nine types of registration
statements and reports. Forms S-1, S-4, S-11, F-1, F-4, F-10, 20-F and
10-K also had significantly more exhibits incorporated by reference
than the other nine types of registration statements and reports
affected by the proposed amendments.
---------------------------------------------------------------------------

    \48\ Average represents the sum of number of exhibits divided by
the number of sampled forms for each form type.
    \49\ Median represents the middle number of exhibits for each
form type when the numbers of exhibits are listed from the smallest
to the largest. For instance, for Forms S-1, the number of exhibits
listed in the index ranged from 0 to 125, with 21 as the middle
number.
---------------------------------------------------------------------------

    In general, the number of exhibits increases with a registrant's
size. Of the 570 sampled filings, the filings by large accelerated
filers had a median of 16 exhibits, of which six were incorporated by
reference; filings by accelerated filers had a median 14 exhibits, of
which five were incorporated by reference; and filings by smaller
reporting companies and non-accelerated filers had a median of 12
exhibits, of which only two were incorporated by reference.
    Of the 570 sampled filings, we found that the exhibit indexes of
only 6% of the filings included hyperlinks. We found only two filings
that included hyperlinks for all exhibits. In the 30 instances when
registrants did not include hyperlinks for all exhibits, they were more
likely to include hyperlinks to exhibits filed with the document. Of
the sampled filings on Form S-1, S-4, S-11, F-1, F-4, F-10, 20-F and
10-K, approximately 7% had exhibit indexes that contained hyperlinks
for one or more exhibits in the index (``partially hyperlinked''). In
particular, while we found no fully hyperlinked Form 10-K, 8% of the
150 sampled Form 10-Ks were partially hyperlinked.
    To check whether current hyperlinking practices differ among
registrants, we looked at registrants' filer status and found that
smaller reporting companies and non-accelerated filers were more
inclined to include hyperlinks to their exhibits than large accelerated
filers or accelerated filers. We also reviewed the most recent Form 10-
Ks filed in calendar year 2015 by each of the companies on the Fortune
100 list, which includes the largest 100 U.S. companies.\50\ We found
no companies in the Fortune 100 list that provided hyperlinks to any of
the exhibits listed in their most recent Form 10-K exhibit indexes.
---------------------------------------------------------------------------

    \50\ Eight entities included in the Fortune 100 list are
privately-held companies; therefore, no Form 10-Ks were available
for them.

                                        Table 3--Type of Forms From Which Exhibits Were Incorporated by Reference
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                                                Other forms     Other forms
                                                                                with exhibit       without
 Exhibit incorporated by reference  From:     Form S-1     Form F-1    Form 10-K    Form 20-F     Form 8-K    Form 10-Q        index       exhibit index
                                                (%)          (%)          (%)          (%)          (%)          (%)        requirement     requirement
                                                                                (%)          \51\ (%)
--------------------------------------------------------------------------------------------------------------------------------------------------------
Into:
    Form S-1..............................           11            0           14            0           54            9              11               1
    Form S-3..............................           16            0            4            0           58           11               8               3
    Form S-4..............................           17            0           14            0           38            8              17               6

    Form S-8..............................           20            1            9            0           38           14               6              12
    Form S-11.............................            0            0            0            0           59            1              34               6
    Form SF-1.............................  ...........  ...........  ...........  ...........  ...........  ...........  ..............  ..............
    Form SF-3.............................            5            0            0            0           30            0              60               5
    Form F-1..............................            0           44            0           33            0            0               0              23
    Form F-3..............................            0           43            0           22            0            0              15              20
    Form F-4..............................            0           54            0           24            3            0               4              15
    Form F-10.............................            0            0            0            0            0            0               3              97
    Form 10...............................            0            0           57            0            7            0               0              36
    Form 20-F.............................            0           31            0           50            1            1               3              14
    Form 10-K.............................           12            0           15            0           41           15               6              11
    Form 10-Q.............................            1            0           27            0           47            4               5              16
    Form 8-K..............................           55            0            0            0           36            0               0               9
    Form 10-D.............................            0            0            0            0            0            0               0               0
--------------------------------------------------------------------------------------------------------------------------------------------------------

    As discussed below, under the proposed amendments, the hyperlink
requirement would make exhibits incorporated by reference in the
affected registration statements and reports more easily accessible.
For the exhibits incorporated by reference that were listed in the 570
sampled filings, Table 3 shows the form types from which the exhibits
were incorporated. The majority of exhibits were incorporated from the
same registration statements and reports affected by the proposed
amendments. For example, exhibits in Forms S-1 were largely
incorporated from previously filed Forms 8-K, 10-K, S-1, 10-Q, and 10.
Only a small percentage of exhibits were incorporated from form types
without an exhibit index requirement, such as proxy statements.
---------------------------------------------------------------------------

    \51\ Pursuant to Securities Act Rule 411 [17 CFR 230.411] and
Exchange Act Rule 12b-23 [17 CFR 240.12b-23], registrants can, under
certain conditions, incorporate information by reference in answer,
or partial answer, to an item of a registration statement or report.
Generally, the incorporated information must be filed as an exhibit
to the registration statement or report. In our analysis of the 570
sampled filings, we found several exhibits that were filed for this
purpose.
---------------------------------------------------------------------------

ii. ASCII Filers
    We reviewed 183 registration statements and reports filed in ASCII
format in calendar year 2015. In particular, we reviewed all of the 63
Form 10-Ks and a randomly selected sample of 120 other forms filed in
ASCII format. The exhibit indexes in the ASCII filings listed
significantly lower averages and median numbers of exhibits than in
HTML filings. For example, the sampled Form 10-Qs reported a median of
three exhibits, of which two were filed with the form. The 63 Form 10-
Ks filed in ASCII format in 2015 included a median of seven exhibits,
mostly incorporated by reference. Given that the ASCII format does not
support hyperlinks, no exhibit index included hyperlinks.

B. Potential Economic Effects

    Relative to conventional, unlinked cross-references, hyperlinks
would not only supply users with the location of a specific exhibit,
but also allow users to reach that location more easily and quickly.
Requiring exhibit hyperlinks would help investors and other users to
access a particular exhibit more efficiently as they would not need to
search within the filing or through different filings made over time to
locate the exhibit. We expect that hyperlinks would be more beneficial
in reducing search costs in the case of exhibits incorporated by
reference than in the case of exhibits filed with the filing, and in
particular, we expect these benefits to be most pronounced in the case
of incorporation by reference from a filing that was not recently filed
because more recent filings are displayed first. Further, we expect
hyperlinks would have greater benefits in the case of registrants that
submit more filings. Overall, we believe the proposed amendments would
reduce search costs for investors. For example, depending on the nature
of the business or size of the registrant, a registrant may file
multiple registration statements or reports in a given quarter or
fiscal year. Requiring exhibit hyperlinks would make it easier for
investors and other users to find and access a particular exhibit that
was originally filed with a previous filing.
    To the extent that hyperlinks ease the navigation process for
investors and other users, hyperlinks may also facilitate a more
thorough review of a registrant's registration statements and reports
and encourage more effective monitoring over time. The potential
reduction of search costs and the enhanced ability of investors to
review a registrant's disclosure may result in more informed investment
and voting decisions, potentially enhancing allocative efficiency and
capital formation by registrants.
    As a result of the proposed amendments, we expect that both HTML
and ASCII registrants would incur compliance costs to include
hyperlinks in their exhibit indexes. The cost of inserting a hyperlink
to an exhibit incorporated by reference would likely be greater than
the cost of inserting a hyperlink to an exhibit filed with the
document. While the average cost itself of inserting an hyperlink is
minimal,\52\ the total hyperlinking costs for registrants would be a
function of two main factors: (1) How many registration statements and
reports a registrant files that require an exhibit index; and (2) how
many exhibits in the exhibit index of these registration statements and
reports are either filed with the filing or incorporated by reference.
Overall, we expect that these costs would increase with the size of the
registrant as larger filers tend to file more registration statements
and reports and have more exhibits.
---------------------------------------------------------------------------

    \52\ See Section IV. Paperwork Reduction Act, C. Burden and Cost
Estimates Related to the Proposed Amendments, for costs estimates
related to the proposed rule.
---------------------------------------------------------------------------

    In particular, for filers reporting in HTML, our baseline analysis
indicates that few filers currently include fully hyperlinked exhibit
indexes in registration statements and reports. Our analysis of a
random sample of

registration statements and reports filed in 2015 indicates that
approximately 6% of HTML filers included at least a partially
hyperlinked exhibit index in their filings. For these HTML filers, the
cost of fully hyperlinking their exhibit indexes could be less than for
those HTML filers that did not hyperlink their exhibit indexes.
    Filers reporting in ASCII would incur costs to switch to HTML, in
addition to the costs of including hyperlinks in their exhibit indexes.
While the registrants that filed in ASCII that would be affected by the
proposal to require HTML are primarily small entities, we expect that
the costs of switching to HTML would not be significant because the
cost of software with built-in HTML and hyperlink features is minimal.
Overall, given the modest costs involved, we do not expect that the
proposed amendments would have significant competitive effects for
registrants.

C. Alternatives

    We considered four alternatives to the proposed amendments. First,
instead of requiring hyperlinks in the exhibit index within
registration statements and reports requiring an exhibit index under
Item 601 of Regulation S-K and Forms F-10 and 20-F, we considered
requiring registrants to include hyperlinks in a subset of these
registration statements and reports. For example, we could have limited
the hyperlinks requirement to exhibit indexes in those registration
statements and reports that typically include lengthy exhibit indexes.
Our analysis of a random sample of registration statements and reports
filed in calendar year 2015 indicates that exhibit indexes are more
frequently filed in Forms S-1, S-8, 10-K, 10-Q, 8-K, and 10-D, but are
lengthier in Forms S-1, S-4, S-11, F-1, F-4, F-10, 20-F, and 10-K based
on the average and median number of exhibits included in the exhibit
index. For example, Forms 8-K and 10-Q are frequently filed but
typically list a limited number of exhibits, most of which are included
in the filing itself. Relative to the proposed amendments, the
alternative of limiting the scope of the exhibit hyperlink requirement
to fewer form types would lead to cost savings for registrants but also
a smaller reduction in search costs for investors and other users.
    Second, instead of requiring registrants to hyperlink each exhibit
included in the exhibit index, we considered requiring registrants to
hyperlink only exhibits incorporated by reference. Our analysis of the
random sample of 2015 filings indicates that, among the registration
statements and reports, Forms 20-F and 10-K typically include a higher
number of exhibits incorporated by reference. This alternative would
lead to nominal cost savings for registrants but also a smaller
reduction in search costs for investors, although search costs related
to exhibits filed with the document may be relatively limited.
    Third, we considered requiring registrants to file and update a
compilation of exhibits separately from the Form 10-K and other forms.
A separate compilation of exhibits could have more prominence and make
it easier for investors and other users to access relevant information
on EDGAR, as there would be only one compilation for all exhibits
regardless of what forms a registrant may file. Requiring a separate
compilation, however, would impose an additional burden on registrants
to prepare, file and update this disclosure and could make our
disclosure regime more complex to the extent that relevant information
is spread over multiple filings.
    Fourth, we considered excluding ASCII filers from the proposed
requirement to hyperlink to each exhibit identified in the exhibit
index and permitting them to continuing filing in ASCII. Relative to
the proposed amendments, this alternative could be beneficial to ASCII
filers as they would not incur the additional, although minimal,
compliance costs of switching to HTML and hyperlinking their exhibit
indexes. However, under this alternative, investors and other users of
the information disclosed in ASCII filings would not benefit from
reduced search costs.
Request for Comment
    We request comment on the potential costs and benefits of the
proposed rules and whether the rules, if adopted, would promote
efficiency, competition, and capital formation or have an impact or
burden on competition. Commenters are requested to provide empirical
data, estimation methodologies, and other factual support for their
views, in particular, on costs and benefits estimates.

IV. Paperwork Reduction Act

A. Background

    Certain provisions of our rules and forms that would be affected by
the proposed amendments contain ``collection of information''
requirements within the meaning of the Paperwork Reduction Act of 1995
(``PRA'').\53\ The Commission is submitting the proposal to the Office
of Management and Budget (``OMB'') for review in accordance with the
PRA.\54\ The titles for the collections of information are:

    \53\ 44 U.S.C. 3501 et seq.
    \54\ 44 U.S.C. 3507(d) and 5 CFR 1320.11.

``Form S-1'' (OMB Control No. 3235-0065);
``Form S-3'' (OMB Control No. 3235-0073);
``Form S-4'' (OMB Control No. 3235-0324);
``Form S-8'' (OMB Control No. 3235-0066);
``Form S-11'' (OMB Control No. 3235-0067);
``Form F-1'' (OMB Control No. 3235-0258);
``Form F-3'' (OMB Control No. 3235-0256);
``Form F-4'' (OMB Control No. 3235-0325);
``Form F-10'' (OMB Control No. 3235-0380);
``Form SF-1'' (OMB Control No. 3235-0707);
``Form SF-3'' (OMB Control No. 3235-0690);
``Form 10'' (OMB Control No. 3235-0064);
``Form 20-F'' (OMB Control No. 3235-0288);
``Form 10-K'' (OMB Control No. 3235-0063);
``Form 10-Q'' (OMB Control No. 3235-0070);
``Form 8-K'' (OMB Control No. 3235-0060);
``Form 10-D'' (OMB Control No. 3235-0604);
``Regulation S-K'' (OMB Control No. 3235-0071); and
``Regulation S-T'' (OMB Control No. 3235-0424).\55\
---------------------------------------------------------------------------

    \55\ The paperwork burdens from Regulations S-K and S-T are
imposed through the forms that are subject to the requirements in
these regulations and are reflected in the analysis of those forms.
To avoid a PRA inventory reflecting duplicative burdens and for
administrative convenience, we assign a one-hour burden to each of
Regulation S-K and Regulation S-T.

    The forms, reports and Regulation S-K, were adopted under the
Securities Act and the Exchange Act and set forth the disclosure
requirements for registration statements and reports filed by
registrants to help investors make informed investment and voting
decisions. Regulation S-T was adopted under the Securities Act and the
Exchange Act and sets forth the requirements for the electronic
submission of documents filed or otherwise submitted to the Commission.
The hours and costs associated with preparing and filing the forms and
reports constitute reporting and cost burdens imposed by each
collection of information.
    An agency may not conduct or sponsor, and a person is not required
to respond to, a collection of information requirement unless it
displays a currently valid OMB control number. Compliance with the
information collections is mandatory. Responses to the information
collections are not kept confidential and there is no mandatory
retention period for the information disclosed.

B. Summary of the Proposed Amendments

    As described in more detail above, we are proposing amendments to
Regulations S-K and S-T and Forms F-10 and 20-F to require registrants
that file registration statements and reports

subject to the exhibit requirements of Item 601 of Regulation S-K, or
that file on Forms F-10 and 20-F, to submit these registration
statements and reports in HTML format and to include a hyperlink from
each exhibit identified in the exhibit index of such forms to the
exhibit as filed on EDGAR. Because the software tools to prepare and
file documents in HTML are widely used and available at minimal cost,
we do not believe this requirement would appreciably change the
existing burden estimates for the affected registration statements or
reports, which already include the time and expense to prepare and file
in electronic format on EDGAR.

C. Burden and Cost Estimates Related to the Proposed Amendments

    We anticipate that the proposed amendments requiring registrants to
hyperlink to exhibits would increase the burdens and costs for
registrants to prepare and file the affected forms. We believe the
burdens associated with hyperlinking exhibits would be small as the
registrant would already be preparing the exhibits and exhibit index
for the related filing and would have readily available all the
information necessary to create the hyperlinks. In addition, we assume
that the average burden hours of requiring exhibit hyperlinks would
vary based on the number of exhibits that are included with a filing.
For purposes of the PRA, based on the average and median number of
exhibits shown in Table 2 above, we estimate the average burden for a
registrant to hyperlink to exhibits would be three hours for Forms S-1,
S-4, S-11, SF-1, F-1, F-4, F-10, 20-F and 10-K; two hours for Forms S-
3, S-8, SF-3, F-3, 10 and 10-Q; and one hour for Forms 10-D and 8-K.
    These estimates represent the average burden for all registrants,
both large and small. In deriving our estimates, we recognize that the
burdens will likely vary among individual registrants based on a number
of factors, including the size and complexity of their operations.
    The tables below show the total annual compliance burden, in hours
and in costs, of the collection of information resulting from the
proposed amendments.\56\ The burden estimates were calculated by
multiplying the estimated number of responses by the estimated average
amount of time it would take an issuer to prepare and review the
exhibit hyperlinks. The portion of the burden carried by outside
professionals is reflected as a cost, while the portion of the burden
carried by the issuer internally is reflected in hours. For purposes of
the PRA, we estimate that 75% of the burden of preparation for Exchange
Act reports is carried by the registrant internally and that 25% of the
burden of preparation is carried by outside professionals retained by
the registrant at an average cost of $400 per hour.\57\ For the
registration statements on Forms 10, S-1, S-3, S-4, S-11, F-1, F-3, F-
4, SF-1 and SF-3, and the Exchange Act report on Form 20-F, we estimate
that 25% of the burden of preparation is carried by the company
internally and that 75% of the burden of preparation is carried by
outside professionals retained by the company at an average cost of
$400 per hour. For the registration statement on Form S-8, we estimate
that 50% of the burden of preparation is carried by the company
internally and that 50% of the burden of preparation is carried by
outside professionals.
---------------------------------------------------------------------------

    \56\ For convenience, the estimated hour and cost burdens in the
table have been rounded to the nearest whole number.
    \57\ We recognize that the costs of retaining outside
professionals may vary depending on the nature of the professional
services, but for purposes of this PRA analysis we estimate that
such costs would be an average of $400 per hour. This estimate is
based on consultations with several registrants, law firms and other
persons who regularly assist registrants in preparing and filing
reports with the Commission.

                               Table 4--Incremental Paperwork Burden Under the Proposed Amendments for Exchange Act Forms
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Proposed number    Incremental         Total
                Exchange act forms                    of affected     burden hours/     incremental      75% Company          25%          Professional
                                                       responses           form         burden hours                      Professional        costs
                                                                (A)              (B)  (C) = (A) * (B)      (D) = (C) *      (E) = (C) *      (F) = (E) *
                                                                                0.75             0.25             $400
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form 10...........................................              238                2              476              119              357         $142,800
Form 20-F.........................................              725                3            2,175              544            1,631          652,400
Form 10-K.........................................            8,137                3           24,411           18,308            6,103        2,441,200
Form 10-Q.........................................           22,907                2           45,814           34,361           11,454        4,581,600
Form 8-K..........................................          118,387                1          118,387           88,790           29,597       11,838,800
Form 10-D.........................................           13,014                1           13,014            9,761            3,254        1,301,600
                                                   -----------------------------------------------------------------------------------------------------
    Total.........................................  ...............  ...............          204,277  ...............  ...............       20,958,400
--------------------------------------------------------------------------------------------------------------------------------------------------------

                     Table 5--Incremental Paperwork Burden Under the Proposed Amendments for Securities Act Registration Statements
--------------------------------------------------------------------------------------------------------------------------------------------------------
                                                    Proposed number    Incremental         Total
      Securities act registration statements          of affected     burden hours/     incremental      25% Company          75%          Professional
                                                       responses           form         burden hours                      Professional        costs
                                                                (A)              (B)  (C) = (A) * (B)      (D) = (C) *      (E) = (C) *      (F) = (E) *
                                                                                0.25             0.75             $400
--------------------------------------------------------------------------------------------------------------------------------------------------------
Form S-1..........................................              901                3            2,703              676            2,027         $810,900
Form S-3..........................................            1,082                2            2,164              541            1,623          649,200
Form S-4..........................................              619                3            1,857              464            1,393          557,100
Form S-8..........................................            2,200                2            4,400            2,200            2,200          880,000
Form S-11.........................................              100                3              300               75              225           90,000
Form SF-1.........................................                6                3               18                5               13            5,400
Form SF-3.........................................               71                2              142               36              106           42,600
Form F-1..........................................               63                3              189               47              142           56,700

Form F-3..........................................              107                2              214               54              160           64,200
Form F-4..........................................               68                3              204               51              153           61,200
Form F-10.........................................               40                3              120               30               90           36,000
                                                   -----------------------------------------------------------------------------------------------------
    Total.........................................  ...............  ...............           12,311  ...............  ...............        3,253,300
--------------------------------------------------------------------------------------------------------------------------------------------------------

D. Request for Comment

    We request comments in order to evaluate: (1) Whether the proposed
collection of information is necessary for the proper performance of
the functions of the agency, including whether the information would
have practical utility; (2) the accuracy of our estimate of the burden
of the proposed collection of information; (3) whether there are ways
to enhance the quality, utility and clarity of the information to be
collected; and (4) whether there are ways to minimize the burden of the
collection of information on those who are to respond, including
through the use of automated collection techniques or other forms of
information technology.\58\
---------------------------------------------------------------------------

    \58\ We request comment pursuant to 44 U.S.C. 3506(c)(2)(B).
---------------------------------------------------------------------------

    Any member of the public may direct to us any comments concerning
the accuracy of these burden estimates and any suggestions for reducing
the burdens. Persons who desire to submit comments on the collection of
information requirements should direct their comments to the Office of
Management and Budget, Attention: Desk Officer for the Securities and
Exchange Commission, Office of Information and Regulatory Affairs,
Washington, DC 20503, and send a copy of the comments to Brent J.
Fields, Secretary, Securities and Exchange Commission, 100 F Street
NE., Washington, DC 20549-1090, with reference to File No. S7-19-16.
Requests for materials submitted to the OMB by us with regard to these
collections of information should be in writing, refer to File No. S7-
19-16 and be submitted to the Securities and Exchange Commission,
Office of FOIA Services, 100 F Street NE., Washington DC 20549-0213.
Because the OMB is required to make a decision concerning the
collections of information between 30 and 60 days after publication, a
comment to the OMB is best assured of having its full effect if the OMB
receives it within 30 days of publication.

V. Initial Regulatory Flexibility Act Analysis

    This Initial Regulatory Flexibility Analysis (IRFA) has been
prepared in accordance with the Regulatory Flexibility Act.\59\ It
relates to proposed amendments that would require registrants to submit
registration statements and reports in HTML format and to include a
hyperlink to each exhibit that is filed with such registration
statement or report.
---------------------------------------------------------------------------

    \59\ 5 U.S.C. 601 et seq.
---------------------------------------------------------------------------

A. Reasons for, and Objectives of, the Proposed Action

    The main purpose of the proposed amendments is to improve
investors' access to information--in particular, the ability of EDGAR
users to retrieve and access exhibits that are filed with certain
registration statements and reports.

B. Legal Basis

    We are proposing the amendments under Sections 6, 7, 8, 10 and
19(a) of the Securities Act, and Sections 3, 12, 13, 15(d), 23(a), and
35A of the Exchange Act.

C. Small Entities Subject to the Proposed Rules

    The proposed amendments would affect some companies that are small
entities. The Regulatory Flexibility Act defines ``small entity'' to
mean ``small business,'' ``small organization,'' or ``small
governmental jurisdiction.'' \60\ For purposes of the Regulatory
Flexibility Act, under our rules, an issuer, other than an investment
company, is a ``small business'' or ``small organization'' if it had
total assets of $5 million or less on the last day of its most recent
fiscal year and is engaged or proposing to engage in an offering of
securities that does not exceed $5 million.\61\ An investment company,
including a business development company,\62\ is considered to be a
``small business'' if it, together with other investment companies in
the same group of related investment companies, has net assets of $50
million or less as of the end of its most recent fiscal year.\63\ We
believe that the proposal would affect some small entities that are
investment companies. We estimate that there are 837 issuers that file
with the Commission, other than investment companies, that may be
considered small entities.\64\ In addition, we estimate that there are
34 investment companies that would be subject to the proposed
amendments that may be considered small entities.
---------------------------------------------------------------------------

    \60\ 5 U.S.C. 601(6).
    \61\ See Securities Act Rule 157 [17 CFR 230.157] and Exchange
Act Rule 0-10(a) [17 CFR 240.0-10(a)].
    \62\ Business development companies are a category of closed-end
investment company that are not registered under the Investment
Company Act [15 U.S.C. 80a-2(a)(48) and 80a-53-64].
    \63\ 17 CFR 270.0-10(a).
    \64\ This estimate is based on a review of Form 10-K and 20-F
filings (from EDGAR XBRL) with fiscal periods ending between January
31, 2015 and January 31, 2016.
---------------------------------------------------------------------------

D. Reporting, Recordkeeping, and Other Compliance Requirements

    The proposed amendments would impose new compliance requirements
for small entities. Under the proposals, a registrant (including a
small entity) would be required to submit registration statements and
reports in HTML format and to include a hyperlink to each exhibit
identified in the exhibit index to such registration statement or
report.

E. Duplicative, Overlapping, or Conflicting Federal Rules

    The proposed amendments would not duplicate, overlap, or conflict
with other federal rules.

F. Significant Alternatives

    The Regulatory Flexibility Act directs us to consider alternatives
that would accomplish our stated objectives, while

minimizing any significant adverse impact on small entities. In
connection with the proposed amendments, we considered the following
alternatives:
     Establishing different compliance or reporting
requirements or timetables that take into account the resources
available to small entities;
     Clarifying, consolidating or simplifying compliance and
reporting requirements under the rules for small entities;
     Using performance rather than design standards; and
     Exempting small entities from all or part of the
requirements.
    The proposed amendments would require all registrants that file
registration statements and reports that are subject to the exhibit
requirements of under Item 601 of Regulation S-K (other than Form ABS-
EE), or that file on Forms F-10 or 20-F, to file these forms in HTML
format and to hyperlink to each exhibit (other than an exhibit filed in
XBRL) identified in the exhibit index contained in the form.
    The proposed amendments to require the inclusion of hyperlinks in
the exhibit index would impose only minimal burdens on registrants.
Similarly, the requirement to submit registration statements and
reports in HTML format would not impose significant costs. During
calendar year 2015, approximately 0.74% of the forms that would be
affected by the proposed amendments were filed in ASCII, and we believe
that the HTML format has largely replaced the ASCII format for these
form types. The limited use of ASCII indicates that the proposed
amendments would affect only a limited number of registrants on a one-
time basis. While the registrants that filed forms in ASCII that would
be affected by the proposal to require HTML are primarily small
entities, we expect that the burden to switch from ASCII to HTML would
be not be significant because the software tools to file in HTML format
are now widely used and available at a minimal cost. Accordingly, we do
not believe that it is necessary to establish different compliance
timetables or reporting requirements or exempt small entities from the
proposed amendments. For similar reasons, we have not sought to
clarify, consolidate or simplify the proposed amendments' requirements
for small entities.
    The proposed amendments use design rather than performance
standards in order to promote uniform filing requirements for all
registrants.

G. Request for Comments

    We encourage the submission of comments with respect to any aspect
of this Initial Regulatory Flexibility Analysis. In particular, we
request comments regarding:
     The number of small entity issuers that may be affected by
the proposed revisions;
     the existence or nature of the potential impact of the
proposed revisions on small entity issuers discussed in the analysis;
and
     how to quantify the impact of the proposed amendments.

Commenters are asked to describe the nature of any impact and provide
empirical data supporting the extent of the impact. Such comments will
be considered in the preparation of the Final Regulatory Flexibility
Analysis, if the proposed amendments are adopted, and will be placed in
the same public file as comments on the proposed amendments themselves.

VI. Small Business Regulatory Enforcement Fairness Act

    For purposes of the Small Business Regulatory Enforcement Fairness
Act of 1996 (``SBREFA''),\65\ a rule is ``major'' if it has resulted,
or is likely to result, in:
---------------------------------------------------------------------------

    \65\ Public Law 104-121, Title II, 110 Stat. 857 (1996).
---------------------------------------------------------------------------

     An annual effect on the economy of $100 million or more;
     a major increase in costs or prices for consumers or
individual industries; or
     significant adverse effects on competition, investment or
innovation.
    We request comment on whether the proposed amendments would be a
``major rule'' for purposes of SBREFA. We solicit comment and empirical
data on: (a) The potential annual effect on the economy; (b) any
potential increase in costs or prices for consumers or individual
industries; and (c) any potential effect on competition, investment or
innovation.

VII. Statutory Authority

    The amendments contained in this release are being proposed under
the authority set forth in Sections 6, 7, 8, 10 and 19(a) of the
Securities Act, and Sections 3, 12, 13, 15(d), 23(a) and 35A of the
Exchange Act.

List of Subjects in 17 CFR Parts 229, 232, 239 and 249

    Reporting and recordkeeping requirements, Securities.

Text of the Proposed Amendments

    For the reasons set out in the preamble, the Commission is
proposing to amend Title 17, Chapter II of the Code of Federal
Regulations as follows:

PART 229--STANDARD INSTRUCTIONS FOR FILING FORMS UNDER SECURITIES
ACT OF 1933, SECURITIES EXCHANGE ACT OF 1934 AND ENERGY POLICY AND
CONSERVATION ACT OF 1975--REGULATION S-K

0
1. The authority citation for part 229 continues to read as follows:

    Authority:  15 U.S.C. 77e, 77f, 77g, 77h, 77j, 77k, 77s, 77z-2,
77z-3, 77aa(25), 77aa(26), 77ddd, 77eee, 77ggg, 77hhh, 77iii, 77jjj,
77nnn, 77sss, 78c, 78i, 78j, 78j-3, 78l, 78m, 78n, 78n-1, 78o, 78u-
5, 78w, 78ll, 78mm, 80a-8, 80a-9, 80a-20, 80a-29, 80a-30, 80a-31(c),
80a-37, 80a-38(a), 80a-39, 80b-11 and 7201 et seq.; 18 U.S.C. 1350;
Sec. 953(b) Pub. L. 111-203, 124 Stat. 1904; and Sec. 102(a)(3) Pub.
L. 112-106, 126 Stat. 309; and Sec. 84001, Pub. L. 114-94, 129 Stat.
1312.

0
 2. Amend Sec.  229.601 by revising paragraph (a)(2) to read as
follows:

Sec.  229.601  (Item 601) Exhibits.

    (a) * * *
    (2) Each registration statement or report shall contain an exhibit
index, which must appear before the required signatures in the
registration statement or report. For convenient reference, each
exhibit shall be listed in the exhibit index according to the number
assigned to it in the exhibit table. Where exhibits are incorporated by
reference, this fact shall be noted in the exhibit index referred to in
the preceding sentence. Each exhibit identified in the exhibit index
(other than Form ABS-EE exhibits or an exhibit filed in eXtensible
Business Reporting Language) shall include an active hyperlink to the
exhibit as filed on EDGAR at the time the registration statement
becomes effective or report is filed, whether or not the exhibit is
incorporated by reference, pursuant to Rule 105 of Regulation S-T
(Sec.  232.105 of this chapter). For a description of each of the
exhibits included in the exhibit table, see paragraph (b) of this
section.
* * * * *

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

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

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

0
 4. Amend Sec.  232.11 by revising the definition of the terms
``Hypertext links or hyperlinks'' to read as follows:

Sec.  232.11  Definition of terms used in part 232.

* * * * *
    Hyperlink. The term hyperlink means the representation of an
Internet address in a form that an Internet browser application can
recognize as an Internet address.
* * * * *
0
 5. Amend Sec.  232.102 by revising paragraph (d) to read as follows:

Sec.  232.102  Exhibits.

* * * * *
    (d) Each electronic filing requiring exhibits must include an
exhibit index which must appear before the required signatures in the
document. The index must list each exhibit filed, whether filed
electronically or in paper. For electronic filings on Form F-10 (Sec.
239.40 of this chapter), Form 20-F (Sec.  249.220f of this chapter), or
filings subject to Item 601 of Regulation S-K (Sec.  229.601 of this
chapter) other than Form ABS-EE (Sec.  249.1401 of this chapter), each
exhibit identified in the exhibit index (other than an exhibit filed in
eXtensible Business Reporting Language) shall include an active
hyperlink to the exhibit as filed on EDGAR, whether or not the exhibit
is incorporated by reference, pursuant to Sec.  232.105. Whenever a
filer files an exhibit in paper pursuant to a temporary or continuing
hardship exemption (Sec.  232.201 or Sec.  232.202) or pursuant to
Sec.  232.311, the filer must place the letter ``P'' next to the listed
exhibit in the exhibit index of the electronic filing to reflect the
fact that the filer filed the exhibit in paper. In addition, if the
exhibit is filed in paper pursuant to Sec.  232.311, the filer must
place the designation ``Rule 311'' next to the letter ``P'' in the
exhibit index. If the exhibit is filed in paper pursuant to a temporary
or continuing hardship exemption, the filer must place the letters
``TH'' or ``CH,'' respectively, next to the letter ``P'' in the exhibit
index. Whenever an electronic confirming copy of an exhibit is filed
pursuant to a hardship exemption (Sec.  232.201 or Sec.  232.202(d)),
the exhibit index should specify where the confirming electronic copy
can be located; in addition, the designation ``CE'' (confirming
electronic) should be placed next to the listed exhibit in the exhibit
index.
* * * * *
0
 6. Amend Sec.  232.105 by revising the section heading, paragraphs (b)
and (c) and adding paragraph (d) to read as follows:

Sec.  232.105  Use of HTML and hyperlinks.

* * * * *
    (b) Electronic filers may not include in any HTML document
hyperlinks to sites, locations, or documents outside the HTML document,
except to links to officially filed documents within the current
submission and to documents previously filed electronically and located
in the EDGAR database on the Commission's public Web site
(www.sec.gov). Electronic filers also may include within an HTML
document hyperlinks to different sections within that single HTML
document.
    (c) If a filer includes an external hyperlink within a filed
document, the information contained in the linked material will not be
considered part of the document for determining compliance with
reporting obligations, but the inclusion of the link will cause the
filer to be subject to the civil liability and antifraud provisions of
the federal securities laws with reference to the information contained
in the linked material.
    (d) Electronic filers submitting Form F-10 (Sec.  239.40 of this
chapter), Form 20-F (Sec.  249.220f of this chapter), or a registration
statement or report (other than Form ABS-EE (Sec.  249.1401 of this
chapter)), subject to Item 601 of Regulation S-K (Sec.  229.601 of this
chapter), must submit such registration statement or report in HTML and
each exhibit identified in the exhibit index (other than an exhibit
filed in eXtensible Business Reporting Language) shall include an
active hyperlink to the exhibit as filed on EDGAR at the time the
registration statement becomes effective or report is filed, whether or
not the exhibit is incorporated by reference, unless such exhibit is
filed in paper pursuant to a temporary or continuing hardship exemption
under Rules 201 or 202 of Regulation S-T (Sec.  232.201 or Sec.
232.202) or pursuant to Rule 311 of Regulation S-T (Sec.  232.311).

    Note to paragraph (d):  No hyperlink is required for any exhibit
incorporated by reference that has not been filed with the
Commission in electronic format.

PART 239--FORMS PRESCRIBED UNDER THE SECURITIES ACT OF 1933

0
7. The authority citation for part 239 continues to read, in part, as
follows:

    Authority:  15 U.S.C. 77c, 77f, 77g, 77h, 77j, 77s, 77z-2, 77z-
3, 77sss, 78c, 78l, 78m, 78n, 78o(d), 78o-7 note, 78u-5, 78w(a),
78ll, 78mm, 80a-2(a), 80a-3, 80a-8, 80a-9, 80a-10, 80a-13, 80a-24,
80a-26, 80a-29, 80a-30, 80a-37, and Sec. 71003 and Sec. 84001, Pub.
L. 114-94, 129 Stat. 1312, unless otherwise noted.
* * * * *
0
 8. Amend Form F-10 (referenced in Sec.  239.40) by revising paragraph
D of General Instruction II to read as follows:

    Note:  The text of Form F-10 does not, and this amendment will
not, appear in the Code of Federal Regulations.

United States Securities and Exchange Commission

Washington, DC 20549

Form F-10

Registration Statement Under the Securities Act of 1933

* * * * *

General Instructions

* * * * *

II. Application of General Rules and Regulations

* * * * *
    D. A registrant must file the registration statement in electronic
format via the Commission's Electronic Data Gathering, Analysis, and
Retrieval (EDGAR) system in accordance with the EDGAR rules set forth
in Regulation S-T (17 CFR part 232). For assistance with technical
questions about EDGAR or to request an access code, call the EDGAR
Filer Support Office at<PHONE_NUMBER>. For assistance with the EDGAR
rules, call the Office of Information Technology in the Division of
Corporation Finance at<PHONE_NUMBER>.
    Include an exhibit index in the registration statement, which must
appear before the required signatures in the document. The exhibit
index must list each exhibit according to the letter or number assigned
to it. If an exhibit is incorporated by reference, note that fact in
the exhibit index. Each exhibit identified in the exhibit index (other
than an exhibit filed in eXtensible Business Reporting Language) must
include an active hyperlink to the exhibit as filed on EDGAR at the
time the registration statement becomes effective, whether or not the
exhibit is incorporated by reference, pursuant to Rule 105 of
Regulation S-T (17 CFR 232.105). For paper filings, the pages of the
manually signed original registration statement should be numbered in
sequence, and the exhibit index should give the page number in the
sequential numbering system where each exhibit can be found.
    If filing the registration statement in paper under a hardship
exemption in Rule 201 or 202 of Regulation S-T (17 CFR 232.201 or
232.202), or as otherwise permitted, a registrant must file with the
Commission at its principal office five copies of the complete
registration statement and any

amendments, including exhibits and all other documents filed as a part
of the registration statement or amendment. The registrant must bind,
staple or otherwise compile each copy in one or more parts without
stiff covers. The registrant must further bind the registration
statement or amendment on the side or stitching margin in a manner that
leaves the reading matter legible. The registrant must provide three
additional copies of the registration statement or amendment without
exhibits to the Commission.
* * * * *

PART 249--FORMS, SECURITIES EXCHANGE ACT OF 1934

0
 9. The authority citation for Part 249 continues to read in part as
follows:

    Authority:  15 U.S.C. 78a et seq. and 7201 et seq.; 12 U.S.C.
5461 et seq.; 18 U.S.C. 1350; Sec. 953(b) Pub. L. 111-203, 124 Stat.
1904; Sec. 102(a)(3) Pub. L. 112-106, 126 Stat. 309 (2012), Sec. 107
Pub. L. 112-106, 126 Stat. 313 (2012), and Sec. 72001 Pub. L. 114-
94, 129 Stat. 1312 (2015), unless otherwise noted.
0
10. Amend Form 20-F (referenced in Sec.  249.220f) by revising the
fourth paragraph of the introductory text under ``Instructions as to
Exhibits'' to read as follows:

    Note:  The text of Form 20-F does not, and this amendment will
not, appear in the Code of Federal Regulations.

Form 20-F

* * * * *

Part III

* * * * *

Item 19. Exhibits.

* * * * *

INSTRUCTIONS AS TO EXHIBITS

* * * * *
    Include an exhibit index in each registration statement or report
you file, which must appear before the required signatures in the
document. The exhibit index must list each exhibit according to the
number assigned to it below. If an exhibit is incorporated by
reference, note that fact in the exhibit index. Each exhibit identified
in the exhibit index (other than an exhibit filed in eXtensible
Business Reporting Language) must include an active hyperlink to the
exhibit as filed on EDGAR at the time the document is filed or, if this
form is being used as a registration statement, at the time the
registration statement becomes effective, whether or not the exhibit is
incorporated by reference, pursuant to Rule 105 of Regulation S-T (17
CFR 232.105). For paper filings, the pages of the manually signed
original registration statement should be numbered in sequence, and the
exhibit index should give the page number in the sequential numbering
system where each exhibit can be found.
* * * * *

    By the Commission.

    Dated: August 31, 2016.
Brent J. Fields,
Secretary.
[FR Doc. 2016-21313 Filed 9-9-16; 8:45 am]
 BILLING CODE 8011-01-P