It is well known that Securities Exchange Act Rule 14a-3 requires a public company to send an annual report to its shareholders (or provide access to an annual report) when it holds a meeting to elect directors. Less well known, or perhaps conveniently forgotten in some cases, is the requirement that seven copies of the annual report be mailed or submitted electronically to the SEC “solely for its information.” Likewise, Form 10-K requires certain Section 15(d) companies to send copies of the annual report to the SEC.

Because these “glossy” annual reports include the information required to be disclosed in Form 10-K (which is, of course, filed with the SEC) and serve primarily as marketing materials, filled with color photographs and promotional pieces, the SEC staff has for years turned a blind eye to companies that never got around to sending them copies and, in fact, has quietly preferred not to receive them.

Now, just in time for the spring 2017 proxy season, comes guidance in the form of a CDI that essentially eliminates that antiquated process. After first noting the Rule 14a-3 annual report submission requirements, the Staff then stated that it will not object (read: will be delighted) if a company chooses to satisfy these delivery requirements instead by:

• posting an electronic version of its annual report to its corporate website by the dates specified in Rule 14a-3(c), Rule 14c-3(b) and Form 10-K, respectively, in lieu of mailing paper copies or submitting it on EDGAR, and
• leaving it on the website for at least one year after posting.

If it wants to view a company’s glossy annual report, the Staff is now comfortable going to the company’s website like everyone else, leaving you with one fewer item on your proxy season checklist.