SEC Proposes Requiring BDs to File Forms Electronically

The Securities and Exchange Commission proposed a rule Wednesday to require broker-dealers and other registrants to submit forms electronically.

The plan ”would advance the commission’s efforts to modernize filing for a wide range of registrants,” SEC Chairman Gary Gensler said during the open meeting.

“We live in a digital age — paper certificates for U.S. Treasurys have long been a thing of the past,” Gensler continued. “Our markets and business models have been transformed by electronic trading, the cloud, artificial intelligence, and predictive data analytics. In 2023, one might think that all filings to the commission already could be made electronically. That’s not yet true.”

Gensler continued: “Today, we have the important opportunity to require electronic filing for nearly all of the remaining paper filings required under the Exchange Act.”

The public comment period will remain open for 30 days after publication in the Federal Register or until May 22, whichever is later, the agency said.

As proposed, the amendments would require entities under the Exchange Act to file electronically a range of annual and quarterly forms currently filed on paper, Gensler said.

For example, “brokers and other filers would need to submit electronically their annual audit filings and risk assessment reports,” Gensler stated. “Streamlining the Commission’s filing and processing, this also would help us more quickly analyze filings to ensure compliance with Congress’s laws and our rules.”

The proposal, if adopted, “would save both registrants and the Commission time and resources,” Gensler added. “We oversee more than 3,500 broker-dealers, the vast majority of which submit annual audit reports. While many filers voluntarily submit these audits electronically, nearly half submitted them on paper last year. These filings may run as long as 100 pages.”