June 2, 2016 — SEC Adopts Interim Final Rule That Permits Optional Hyperlinked Summary in Form 10-K

June 2, 2016 — In response to requirements mandated by the FAST Act,1 the SEC yesterday adopted an interim final rule 2 that permits, but does not require, registrants to submit in Form 10-K a summary section that contains hyperlinks to related disclosures in other parts of the filing. The rule, which is principles-based, adds “Item 16 — Form 10-K Summary” to Part IV of Form 10-K and gives registrants the flexibility to determine the summary’s length and location in Form 10-K as well as which disclosures to include in it. The rule will become effective when published in the Federal Register.

Editor’s Note: The SEC considered the rule’s effects on registrants and noted that it was not likely to significantly alter their current disclosure practices. SEC rules do not currently prohibit registrants from voluntarily including a summary in their Form 10-K; however, on the basis of the SEC staff’s review of select Form 10-K filings,3 most do not include such a summary. Instead, the vast majority of registrants include a fully hyperlinked table of contents that allows users to easily navigate to corresponding disclosure items.

The rule also requests feedback on a number of items related to the summary section, including, but not limited to:

The usefulness of the summary.
The need for more prescriptive guidance on the content of the information included.
The location of the summary.
Whether other forms (such as Form 20-F for foreign private issuers) should be amended to specifically permit the summary.

Comments on the rule are due 30 days after its publication in the Federal Register.