“I am the CFO of a startup that is looking to raise $50 million through a Regulation A offering. I have the Offering Circular prepared as a Word document, the financials in Excel, and several supporting exhibits as PDF files. I need help putting all this together into a good Reg A SEC Filing. Who can I turn to?”
This CFO needs an SEC or EDGAR Filing Agent, which is a service that can prepare (or help you prepare) EDGAR filings, and then submit them to the SEC on your behalf. If you do not wish to spend your time and resources on formatting your information for EDGAR, learning the mechanics of preparing and submitting filings, and otherwise dealing with EDGAR nuances, you can outsource all that nitty-gritty work to an SEC EDGAR Filing Agent.
Filing agents have the experience, expertise and software tools to appropriately format your documents and information so that your filing appears properly on EDGAR. They also have the necessary experience and knowledge of SEC specifications and procedures to ensure that your filings conform to technical requirements, without omissions or errors that can delay their acceptance.
Many SEC form types now require Inline XBRL tagging, and a full-service EDGAR Filing Agent will be equipped to understand your company’s financials and tag your filings correctly so that they appear error-free on EDGAR and third-party sites that analyze, extract data from, and report on XBRL-tagged filings.
Filing agents in general are not securities lawyers, and are not equipped to provide legal advice. However, they can often give you practical guidance regarding your filings based on their experience and working knowledge.
Filing Agents have their own CIK
A Filer is the entity (corporation, LLC, mutual fund, closed-end fund, etc.) or individual who is reporting to the SEC. A Filing Agent is an entity that provides the service of preparing and submitting Filers’ filings on their behalf. Understanding the relationship between the Filer and Filing Agent requires an understanding of SEC Access Codes, which determine what the Filing Agent can and cannot do on behalf of the filer.
Every filer must obtain Access Codes from the SEC before it can submit any filing. This is sometimes called “registering with the SEC”, and filers who have obtained access codes are called Registrants. The SEC provides four access codes to each registrant:
- CIK (Central Index Key) – This is a 10-digit number that uniquely identifies the Filer (Registrant), and is public information. At the SEC website, you can readily look up the CIK of any registrant, as well as the registrant associated with any CIK (here is the link). A CIK, once assigned to a registrant, holds for the lifetime of the registrant, and a new (different) CIK may not be assigned to the same registrant.
- Password – This is a 12-character code which the registrant uses (along with the CIK) to log into non-public SEC websites. The password is private, and the registrant should not disclose it to outside parties, not even to a Filing Agent working on its behalf. The password expires after one year. The registrant may change it at any time, but certainly must do it before it expires.
- CCC (CIK Confirmation Code) – This is an 8-character code that confirms the validity of a CIK. It must be included in the registrant’s filing along with its CIK to establish validity of the CIK and registrant, but it is not publicly disseminated on EDGAR. The registrant should treat the CCC as private, and disclose it only to a Filing Agent who is submitting the filing on its behalf. The CCC does not expire, and is not affected by password changes, but the registrant may regenerate it if needed (e.g., in case of a security compromise).
- PMAC (Password Modification Access Code) – This is a private 8-character code that is required to change the password. The registrant should not disclose it to outside parties. It does not expire, and is not affected by password changes, but the registrant may regenerate it if needed.
A Filing Agent, whether a person or other entity, has its own Access Codes which are used when it logs into EDGAR to file on behalf of a registrant. It then inserts the registrant’s CIK and CCC into the filing to validate the registrant. This is why the Filing Agent does not require, and should not ask for, the registrant’s password.
Currently, any Filing Agent who has a registrant’s CIK and CCC can file on that registrant’s behalf. That’s why a registrant should not disclose its CCC too freely. Going forward, under the SEC’s anticipated new EDGAR Next program, registrants will need to authorize their Filing Agent(s) by means of a formal delegation process. The delegation will be recorded with the SEC and will most likely have to be renewed annually, and only a Filing Agent properly delegated by the registrant will be able to file on that registrant’s behalf.
Filing Agents by size and cost
SEC filers range from the largest multi-billion dollar public corporations with complex reporting requirements, to single individuals needing relatively straightforward small filings. Correspondingly, EDGAR Filing Agents range from relatively large businesses with thousands of employees, to small businesses with under ten employees, and even sole individuals providing EDGAR Filing services out of their homes.
The larger Filing Agents typically cater to large public companies with relatively complex requirements. They often provide a filing platform (e.g., Workiva Wdesk) on which the Filer’s and Filing Agent’s staff can collaborate, so that Filers may leverage their in-house expertise supplemented by the Filing Agent’s knowledge and experience. These Filing Agents typically provide 24/7 support and are equipped with resources to process large and complex filings within short time frames as needed. Needless to say, these top tier services come at a price, but they are the appropriate choice for large accelerated and similar filers.
Smaller Filing Agents generally cater to companies and individuals with smaller and simpler filings. They may or may not provide 24/7 support, which is typically not a priority for this category of filers. With lower overhead, these Filing Agents are generally much less expensive than the larger houses, catering quite effectively and providing all needed services to smaller and more cost-conscious filers. An experienced Filing Agent in this category (e.g., edgar-services.com) is often a very appropriate and cost-effective option for Smaller Reporting Companies who wish to outsource filings such as 10-K, 10-Q, 8-K, 20-F, 10-F, S-1, 1-A, Form C, Form 13-F, etc., as well as for infrequent or one-time filers requiring filings such as Form ID, Form D, Form 13-H (Large Trader ID), 13-G, 13-D, etc.
The pricing model also varies across Filing Agents:
- Some Filing Agents quote a fixed annual price for a certain number of (or even unlimited) filings for a given registrant, and require an annual contract to do so. In essence each filer pays the pooled “average” cost across a large number of filers. This could be a good option for filers who file frequently, but filers with fewer filings may pay more than they could elsewhere.
- Many filing agents do not require an annual contract. They generally offer fixed pricing for well-defined small filings, while varied filings such as 10-K, 10-Q and other reports are priced depending on the size and complexity of the filing.
- Some Filing Agents openly list their prices for certain SEC form types (for example, edgar-services.com), but most agents require you to connect with them for pricing information.
- Filing Agents are busiest around 10-K and 10-Q filing deadlines, largely end-of-March, mid-May, mid-August and mid-November, and some may offer discounts during less busy periods.
If you’re looking to outsource your SEC EDGAR Filings, the above discussion has hopefully provided useful background. The factors to consider when evaluating an EDGAR Filing Agent include:
- Does the Filing Agent have its own Access Codes?
- Is the Filing Agent knowledgeable and experienced? How long has it been in business providing these services?
- Is the Filing Agent experienced in XBRL (if required by your filing)?
- Is the Service technically adequate? For example, can the Filing Agent provide you Interactive Inline XBRL Rendering prior to filing, so you can preview exactly how it will appear on EDGAR?
- Is the Filing Agent readily accessible, prompt and reliable? How is the turn-around time?
- Is the Agent attentive to detail, e.g., proper formatting of your documents, XBRL tagging, etc.?
- Are you comfortable with the pricing model, and are the fees reasonable and in line with the nature of your filing and turn-around time requirement?