SEC Adopts Amendments Requiring Electronic Filing of Forms 144
On June 2, 2022, the U.S. Securities and Exchange Commission (the “SEC”) announced the adoption of its 2021 proposed amendments regarding the mode of filing certain forms and documents. Historically, SEC rules permitted or required paper filings for most documents. These new amendments mandate electronic filings of numerous reports, including all Forms 144 for the sale of securities where the issuer of the securities is subject to the reporting requirements under Section 13 or 15(d) of the Exchange Act. In adopting these amendments, the SEC seeks to expedite the availability of documents, eliminate the burden of paper filings, and make the EDGAR system more comprehensive.
Other amendments regarding Form 144 include simplifying Form 144 to be an online fillable document and eliminating certain personally identifiable information. Likewise, Rule 144(h)(1) is amended such that the filer no longer needs to deliver a copy of Form 144 to the principal exchange on which the securities are trading.
By transitioning to electronic filing, the SEC has caused information regarding insiders, defined as executives, directors, and large stakeholders, to become widely available to the public and readily searchable. Whether the broader availability of such insider trading information will lead to further analysis into the parity of information between insiders and the public and whether that parity leads to insiders doing better in the market remains to be seen, but publications such as the Wall Street Journal  are already using electronic Form 144 filings to analyze insider trading plans and monitor affiliate trading activity.
The SEC is providing filers with a six-month transition period to begin submitting Form 144, as well as the other forms affected by the amendments, electronically. First-time electronic filers will need to complete the EDGAR Form ID process to obtain a central index key number with the SEC before they can file. It is important to note that the amendments do not apply to Form 144 filings relating to the sale of securities by non-reporting companies.