On September 27, 2024, the Securities and Exchange Commission (the “SEC”) adopted amendments to Regulation S-T that will improve the security of the Electronic Data Gathering, Analysis and Retrieval system (“EDGAR”) and will change how most filers interact with EDGAR. This new system is called “EDGAR Next” and is likely the most transformative change for filers since electronic filing became mandatory in the late 90s (or as the Gen Alphas accurately but cruelly say – the late 1900s).
Background
All public companies, including their executive officers and directors, and any individual or entity that files beneficial ownership reports with the SEC is an EDGAR filer. All EDGAR filers, whether it be entities or individuals, have accounts on the EDGAR platform that allow them to manage their name, contact information and filing fee funds. Unless filers have authorized another person or service provider to file on their behalf, filers can also submit certain required filings through their EDGAR accounts, such Form Ds or Section 16 reports.
In order to obtain EDGAR filing codes, new filers submit a Form ID application (“Form ID”) through EDGAR, which then establishes an EDGAR account for the filer. As the EDGAR account system currently operates, any individual with a filer’s EDGAR codes can access that filer’s account and file reports on its behalf, leading to potential security risks for filers if their EDGAR codes fall into the wrong hands.
What’s Changing
All existing EDGAR filers must enroll in EDGAR Next, the SEC’s new system for maintaining EDGAR filer accounts. A filer may designate a representative to complete the enrollment process on their behalf. Only one person may enroll each EDGAR filer. Each EDGAR filer must authorize specific individuals who will be responsible for the management of their EDGAR accounts (“Account Administrators”). An entity must have two Account Administrators. Individuals are required to have only one Account Administrator, although two administrators is recommended.
Account Administrators will be required to create individual account credentials to access and manage the filers’ accounts through the EDGAR Next dashboard. The website through which Account Administrators can create credentials and access a filer’s account is Login.gov. Accessing the EDGAR Next dashboard will include a multifactor authentication process, part of the enhanced security measures enabled by the switch to EDGAR Next.
The EDGAR Next system will allow EDGAR filers to create optional application programming interfacing (“APIs”) to allow EDGAR filers to make submissions, retrieve filing information and perform account management tasks in a more efficient manner.
The SEC is also amending Form ID to modernize it and make it more user-friendly.
Compliance Timeline
Next Steps
EDGAR filers should begin gathering the requisite information in order to prepare for the EDGAR Next enrollment process commencing on March 24, 2025. This information includes: (1) the filer’s CIK, CCC and passphrase; (2) the authorized individual who will enroll the filer into EDGAR Next; (3) the names, email addresses and telephone numbers of those who will be designated as Account Administrators; and (4) for Account Administrators, creating log-in credentials on Login.gov.
The SEC has created an EDGAR Next adopting beta platform where individuals can log on with their Login.gov credentials in order to test the new Form ID, navigate the new EDGAR Next dashboard and review the new APIs.
If EDGAR filers do not enroll in EDGAR Next by the deadline, they will not be able to make EDGAR filings after December 19, 2025. If a public company does not enroll, it risks filing a periodic report late, which could result in losing Form S-3 eligibility. For public company directors and officers, filing a Section 16 report late could result in unwanted disclosure in the next year’s proxy statement or, if an egregious failure to file, an SEC enforcement action. All EDGAR filers should take care to enroll in EDGAR Next before Fall 2025 to ensure a smooth transition to the new system.
If you have questions about how the transition to EDGAR Next will impact you, please contact a member of Harter Secrest & Emery’s Securities and Capital Markets group.