SEC Filing Fee Disclosure and Payment Methods Modernization

Alerts / November 12, 2021
Key Takeaways
  • The Securities and Exchange Commission (SEC) is amending the content, structure and location of fee-related information in order to expedite the filing process.
  • Filers may pay filing fees via wire transfer, ACH, debit card or credit card beginning May 31, 2022.

On Oct. 13, 2021, the SEC voted unanimously to adopt amendments that will modernize filing fee disclosures and filing fee payment methods. First, the amendments require filers to present the filing fee disclosures in a tabular format using Inline eXtensible Business Reporting Language (Inline XBRL) and to include the appropriate tables as an exhibit to the filing. Second, the amendments simultaneously remove paper checks and money orders and add automated clearing house (ACH), credit card and debit card payments as acceptable payment methods, effective May 31, 2022.

Filing Fee Disclosure: Location

While the SEC considered proposals that would require filers of fee-bearing filings to include fee-related information in narrative form on the cover page of the filing, it determined that a tabular presentation of the information as an exhibit to the filing would be more expeditious for processing. Filers of affected forms and schedules will be required, as of Jan. 31, 2022, to add a filing fee disclosure exhibit.

Filing Fee Disclosure: Content

Beginning Jan. 31, 2022, the SEC will require all affected forms and schedules, set forth below, to contain specific fee-related information in a table. There are three tables to consider. All affected forms must include “Table 1: Newly Registered and Carry Forward Securities,” which must contain the following columns with the corresponding information:

  • Type of security.
  • Registration form type, file number and initial effective date of one or more previously filed registration statements associated with any unsold securities that the registrant is carrying forward.
  • Fees paid in connection with any amendment.
  • Entries for total offering amounts, total amount of fee offsets, and total due net of fee offsets and any previously paid amounts.

If filers are offsetting fees, they must also include “Table 2: Fee Offset Claims and Sources.” The SEC also voted to amend specific rules for filers that are claiming an offset but do not rely on Rule 457(o). Generally, the amendments permit registrants to reallocate, prior to effectiveness, the filing fees for two or more classes of security included in a registration statement.

“Table 3: Combined Prospectuses” is required only when there is a single prospectus that relates to two or more registration statements.

The SEC’s amendments for the content required in filing fee disclosure tables affects Securities Act Forms S-1, S-3, S-4, S-8, S-11, F-1, F-3, F-4, F-10, N-2 and N-14; Exchange Act Schedules 13E-3, 13E-4F, 14A, 14C, 14D-1F, and TO; and Rule 13(e)-1. The final rule contains additional amendments for specific forms and schedules.

Filing Fee Disclosure: Structure

In addition to the content and location requirements for filing fee-related information, the SEC amendments will require filers to structure the information using Inline XBRL, except that the SEC will not require, but will permit, filers of Forms S-1 and S-3 to use Inline XBRL. The EDGAR system will soon include Inline XBRL for filers to create the tables within the EDGAR system. To mitigate the complexity, the SEC will add features in the system – such as prompts, explanations and automated calculations – to assist filers in creating the filing fee disclosure tables. Unlike with the location and content requirements, the SEC created an extended period of time for filers to adjust to the Inline XBRL structuring requirement.

The SEC will provide to filers advance notice of the specific date for beginning Inline XBRL compliance. Once the EDGAR system is prepared for the new structure, likely six months before the earliest compliance date, filers will be permitted to use the new Inline XBRL structure for filing fee-related information, and the SEC will create a separate test system for filers that want practice with the new requirements. Large accelerated filers will have to comply with the Inline XBRL requirement by July 31, 2024. Accelerated filers, certain investment companies that file registration statements on Forms N-2 and N-4, and all other filers will have to comply with the Inline XBRL requirement by July 31, 2025. Nonetheless, for three months following the compliance dates, the SEC will not suspend for incorrect structuring any filings that use Inline XBRL.

Fee Payment Process

The amendments change the payment options available for registrants making fee-bearing filings. Currently, registrants may pay filing fees via wire transfer, paper check or money order. The SEC is eliminating the more laborious physically mailed payment methods and adding faster electronic payment methods. As of May 31, 2022, the SEC will accept payments through wire transfer, ACH, debit card or credit card. Registrants will be able to pay via debit card, credit card or ACH through the EDGAR system, and the U.S. Treasury’s webpage will complete the processing. ACH processing generally will require one to three business days, and payments by card generally will process within 24 hours.

While the new payment methods are friendlier to non-U.S. filers, there are still restrictions for those filers to consider. Credit cards and debit cards must be issued by a U.S. financial institution, and ACH is accessible only to filers with a U.S. bank account. And while it is possible to complete a wire transfer from a different country, the SEC acknowledges that payments via wire transfer may be problematic because of the inconsistency of processing in different countries.

The full release containing the amendments and the SEC’s analysis can be found here.

Authorship credit: Robert A. Weible, Caroline H. Mills and Janet A. Spreen

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