On October 24, the Securities and Exchange Commission proposed amendments to update filing fee disclosure and payment methods. The proposed amendments would apply to most fee-bearing forms, schedules and statements, including Forms S-1, S-3, S-4, S-8 and S-11, related foreign private issuer forms, proxy statements, information statements, Schedule TO and certain Investment Company Act of 1940 forms.
The SEC has proposed to replace the current fee disclosure structure — which is highly manual, labor intensive and not machine read-able — with a new disclosure regime requiring that the fee table on the cover page of a filing, together with all related explanatory notes, include all required information for the applicable fee calculations and be presented in a structured format using Inline eXtensible Business Reporting Language (Inline XBRL). This Inline XBRL format, with new required accompanying notes, would eliminate the need to include fee data in multiple places within a filing and the related EDGAR submission header, reducing the risk of data input error by the filer or its filing agent and enabling more efficient automated processing of fee calculation information by the SEC.
The proposals are intended to streamline otherwise complicated fee disclosures, which may include fee “carryforwards” or offsets and which may involve multiple transactions by a filer. Amended forms would include new checkboxes for filers to indicate reliance on any carryforwards or offsets and require additional disclosure and notes, including a requirement to include the applicable fee rate and other inputs used to calculate the fee in the fee table. If implemented, the proposed amendments would allow for the SEC staff to use automated tools to review and validate payment information faster and more efficiently, replacing the current system of manual review of all fee information in every fee-bearing filing, and providing more certainty to filers that the proper fees have been paid.
The SEC also proposed to modernize the processing of filing fee payments, by introducing an option for fee payment via ACH (in addition to the current option of using wire transfer) and removing the option to pay fees via physical check.
The full text of the SEC’s proposed amendments is available here.