SEC simplifies electronic filing for companies while saving taxpayer dollars

The U.S. Securities and Exchange Commission (SEC) is an independent regulatory agency formed to protect investors and maintain the integrity of the securities markets. The SEC is the primary overseer and regulator of the U.S. securities markets, and works closely with many other institutions including Congress and other federal departments and agencies. Public companies are required to electronically disclose meaningful financial and other information to the SEC. The SEC then distributes this information to the public electronically.

Challenges faced
The Electronic Data Gathering, Analysis & Retrieval System (EDGAR) is the SEC system that accepts regulatory documents filed over the Web and disseminates that information electronically to data vendors and the public.

EDGAR receives between 12 million and 16 million pages of documents annually from more than 28,000 different entities, totaling more than 350,000 filings each year.

The EDGAR system and database were stretched to their technical limits, in part because EDGARLink, the SEC’s client filing software, was an outdated, complex, character-based system.

The SEC sought to modernize EDGARLink to:

• Improve service through an elegant, easy-to-use interface
• Maintain stringent security measures
• Maintain strict legal and regulatory compliance
• Cut costs

SEC system designers required a system that would meet the data needs of all users, including filers, internal SEC users, database information companies, investors, external users and taxpayers.

In particular, filers wanted an easy and less expensive way to prepare documents; SEC staff needed the ability to easily read and navigate documents; and data warehouse providers preferred all data elements tagged for easy parsing.

Success strategy
The SEC leveraged cutting-edge technology by selecting the secure XML e-forms of IBM Lotus Forms (formerly known as IBM Workplace Forms). The agency modernized EDGAR, including revamping the client EDGARLink package, to simplify the filing of disclosure reports for external customers and improve ease-of-use for internal users.

The decision to use XML as the filing format ensured maximum data sharing while providing transparency to the user. Secure IBM Lotus Forms e-forms are now XML templates for all 397 SEC forms, including S1s, 10Ks and 10Qs. Unlike the previous SEC templates, the IBM Lotus Forms XML protocol (Extensible Forms Definition Language) templates do not require someone to read the templates before they are sent.

Forms are downloaded from the EDGAR Web site, completed, validated, digitally signed and securely submitted to the SEC. Related documents can be attached to the forms, increasing ease of use and streamlining the filing process.

The inclusion of VeriSign as the Certificate Authority enables secure filing via the Web. A complete public key infrastructure (PKI) is now in place for the EDGAR system thanks to VeriSign and the integration of IBM Lotus Forms with digital signatures, digital certificates and Secure Sockets Layer protocol.

EDGARLink’s new look
EDGARLink provides several new features:

• Attachment and review of HTML or ASCII documents
• Easy to understand labels and fill-in-the-blank forms
• Validation of documents as they are attached
• Check status of filings online
• Link to EDGAR Web site within EDGARLink application
• Validate input as it is typed

Business benefits
The IBM Lotus Forms XML, browser-based system meets all of the SEC’s requirements. The solution simplifies processes internally, as well as externally with document filers and the investment community. Filing is faster and easier than ever before. “Public company financial documents used to be submitted in hard-copy format using couriers, overnight mail and regular postal services,” says Rick Heroux, EDGAR program manager. “Now the information is disseminated worldwide within minutes of receipt.”

In addition, the solution has reduced costs substantially. The dissemination service has saved subscribers more than US$234,000 per year in subscription rates. Taxpayers save approximately US$150,000 per month in maintenance costs. The SEC’s visionary approach also ensures that it meets Government Paperwork Elimination Act (GPEA) requirements, protects security and maintains legal and regulatory compliance.

For more information
Please contact your IBM sales representative or IBM Business Partner.

Visit us at: ibm.com/software/lotus/forms

For more information about the SEC, visit: www.sec.gov

Key Components

Software
· IBM Lotus Forms secure XML e-forms