SEC paperless push leaves documents out in the cold

As part of its effort to become a truly paperless organization, the Securities and Exchange Commission said this month it will begin returning to companies and individual investors all paper documents that should have been filed electronically.

Each year the SEC receives millions of electronic pages of data from publicly traded companies, individual investors and go-between companies on subjects ranging from financial performance to company ownership to merger-and-acquisition plans and a host of other business activities.

Since the 1980s the SEC has been migrating toward a paperless approach to doing business. Most documents now come in electronic form and, once examined by SEC officials, are made available electronically to the public through the agency's Electronic Data Gathering, Analysis and Retrieval (EDGAR) World Wide Web site (

Beginning this month, the agency is taking its paperless plans one step further. If a company or investor submits a hard copy of a document that should have been filed electronically, the agency will not accept it. Mail will be returned and couriers will be turned away, according to the agency's Web site.

Most companies already are complying with the electronic-filing requirements, according to Margaret Black, a computer specialist in the SEC's Division of Corporation Finance. She said the number of documents that came in this year in paper form but that were required to be filed electronically numbered only in the hundreds. But dealing with paper is still time-consuming for the agency and prevents it from putting documents online rapidly for investors to view via the EDGAR Web site.

"[Electronic filing] gives instant access to the information. And the commission in championing the investor and protecting the investor," Black said.

Avoiding a Paper Avalanche

The move is important if the agency is to hold the line on a policy that keeps the SEC from being buried in paper, according to observers. "They were literally drowning in paper," said David Rosenstein, director of corporate communications at New York-based financial printing firm Bowne & Co. The tightening of electronic-filing requirements also is expected to be a boon to the users of SEC information.

"As long as everyone is electronic-filing with the SEC, it makes it easier to go out and retrieve information," said Anne Scavone, vice president and controller at IMC Global Inc., a public company that deals in agricultural products.

Scavone also said there are benefits to the public company that has to file its documents electronically. "We can get the thing filed at the last minute if need be, so from that end it gives us a lot more flexibility," she said. "Secondly, it just provides much better assurance because as soon as we're filed, we get a message back saying that it's been received."

But preparing documents for electronic filing is not always quick and easy.

Jeanne DuPont, executive assistant at Hecla, said it can take her as many as four hours to clean up a 35-page ASCII document translated from a word processing program into ASCII for EDGAR filing.

The SEC is expected to award in March the follow-on to the original EDGAR contract, awarded to BDM International Inc. in 1989. Industry is expecting the new EDGAR software to be more user-friendly than the current interface.


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