EDGAR gets Web fever
- By Bryant Jordan
- May 29, 2000
New rules at the Securities and Exchange Commission place the Internet at
the center of a plan to upgrade EDGAR, the 16-year-old automated system
for receiving, processing and publishing corporate filings of publicly held
Companies will now be able to use the Internet to transmit HTML files — complete with graphics — to EDGAR (the Electronic Data Gathering, Analysis
and Retrieval system). They will also be able to include hyperlinks to previously
filed documents in the EDGAR database. Richard Heroux, program manager for
EDGAR, said the changes offer significant improvements over the previous
system. For one thing, HTML is a much better presentation format than the
previous file format, ASCII text, he said.
The changes will also eliminate at least one step in the submission
process. Filers now must prepare their forms in one format and then convert
them to ASCII for transmission to EDGAR.
"We wanted to eliminate that [step] by moving to a better format so
they can push a button, spit out an HTML document and send that to us,"
Since last June the SEC has permitted companies to file in HTML, though
without images or hyperlinks. Companies have also been able to submit unofficial
documents in Adobe Systems Inc.'s Portable Document Format.
With the new Internet filing option, companies upload their files to
an internal EDGAR system, according to Heroux. The agency then uses that
data to update the Web site and make the documents available to the public.
To secure the company filings via the Internet, the SEC is using company
log-ins, passwords, certification and a secure tunnel for transactions.
"We're using Internet best practices for our security PKI [public-key infrastructure],"
Heroux said. "It's the same as a lot of online banking companies use."
Heroux said the agency has no estimates of how many filers will use
the Internet for their reports, "but we think people will try it," he said.
"A lot of people have been clamoring for this, but there is still a
desire for people to use the dial-up line," he said. "We'll keep both for
awhile and adjust accordingly. We have enough capacity in both areas to
Also, after Jan. 2, 2001, the SEC will no longer require companies to
file Financial Data Schedules, which are exhibits to the 10-K and 10-Q forms
that are not subject to the same regular accounting standards.
Companies were preparing the schedules by extracting information from
their other audited filings according to a detailed tagging scheme required
by the EDGAR system. Often, administrative staffs, not accountants, prepared
them, so mistakes were common, the SEC found.